Monday 13th October 2008
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The average New Zealand sale price fell to NZ$379,854 in September, according to Quotable Value, the government valuation agency.
"We are moving into an economic recession and there is plenty of speculation that things will get worse before they get better," said Mark Dow, a spokesman for QV Valuations. "Indications last month that a more optimistic mood had come over the market have since evaporated."
The central bank may have embarked on its steepest easing cycle since 2001, when the official cash rate was cut 175 basis points in 11 months. Some economists predict this cycle will be bigger, with a 50 basis point cut on October 23 and at least the same amount again by Christmas.
Still, banks fund much of their mortgage books by borrowing overseas, where frozen credit markets have driven up costs. The New Zealand economy has contracted for three straight quarters, according to Goldman Sachs JBWere.
According to the QV figures, property prices in the Auckland area fell 7% to an average NZ$495,161. Hamilton prices declined 8.8% to NZ$353,465. The average price in Wellington fell 5.4% to NZ$424,098 and in Christchurch the drop was 7.1% to NZ$356,357.
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