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Average house price fall 6.8% in October: QV

Monday 10th November 2008

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The average New Zealand house price fell 6.8% in October from a year earlier as the nation's prolonged economic contraction sapped demand for property.

The decline increased from the 5.8% rate in the previous month, according to Quotable Value, the government valuation agency. QV compares property value in the latest three months to the same period last year. The average sale price was $379,290 last month, down from $379,854 in September, it said.

"There appears to be uncertainty in the market, with many buyers and sellers waiting to see any impact from the financial crisis, dropping interest rates and the election before committing to property transactions, said Blue Hancock, a spokesman for QV Valuations. "Activity levels remain unusually low, especially considering that spring usually brings an upsurge in the number of house sales."

The nation's recession and the prospects of broader impact from declining world growth has spurred the central bank to slash interest rates since July. Some economists predict Governor Alan Bollard will cut the official cash rate by a further 50 basis points next month.

According to the QV figures, property prices in the Auckland area fell 7.7% over the past year to an average $498,383. Hamilton prices declined 9% to NZ$349,253. In Tauranga, the price fell 7.9% to $436,765 and in Wellington, decreased 6.1% to $411,228. In the South Island, prices fell 7.8% to $354,691 and in Dunedin dropped 8.2% to $257,950.

By Jonathan Underhill

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