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New Zealand house prices rise in January - QV survey
Reuters - Monday, February 8
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WELLINGTON, Feb 8 - New Zealand house prices gained for the fourth month in a row in January, but activity was patchy pointing to uncertainty in the market, government agency Quotable Value said on Monday.
QV's residential house price index rose 4.4 percent in the year to January, compared with a 2.8 percent annual rise in December and a 1 percent gain in November.
Prices were still 4.3 percent below the market peak in late 2007.
But market activity was below normal levels with the usual pick-up in listings in January after Christmas failing to materialise.
"There are also signs of increasing indecision in the market, fuelled by uncertainty over interest rates, employment, which direction property prices are likely to move, and the recently announced tax working group recommendations," QV valuation manager Glenda Whitehead said in a statement.
The housing market, once a major inflationary concern for the Reserve Bank of New Zealand , fell sharply from its 2007 peak due to high borrowing costs and prices, while consumers cut spending amid a deepening recession and rising unemployment.
On Jan. 20 a government-appointed review group said New Zealand's tax system should be overhauled, with its recommendations including steps to close loopholes and rectify anomalies which are seen favouring residential property investment - a longtime favourite of New Zealand investors. [ID:nSGE6OI0JO]
Whitehead said it was too early to predict the likely pace of the housing market in 2010, and it as possible tax reform might potentially hurt the sector, but prices were also driven by a mix of factors including interest rates, employment and bank lending practices.
The economy emerged from its longest recession in 30 years with two quarters of slender 0.2 percent growth to finish 2009, and the central bank has signalled higher rates are likely to start around the middle of this year.
The national average sale price in January rose 1.3 percent to NZ$409,807 from December.
House prices in Auckland, the biggest city, were 7.6 percent higher, compared with a 5.2 rise in December, while the capital, Wellington, was up 6.1 percent from the previous month's 5.1 percent gain.
However, QV also noted that in regional cities prices had lagged with some barely moved or even fallen.
The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the same period a year earlier. The data is not seasonally adjusted.
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