New Zealand House Sales Fall 42% From Year Ago, Prices Decline

By Tracy Withers

July 11 (Bloomberg) -- Sales of New Zealand houses slumped for a fourth straight month in June as record-high interest rates curtailed demand for property.

The number of homes sold dropped 42.4 percent to 4,305 from 7,474 a year earlier, according to a report from the Real Estate Institute of New Zealand Inc. e-mailed to Bloomberg News today. Sales were at the lowest level since December 1991.

A cooling real estate market supports Reserve Bank Governor Alan Bollard's view that house prices will fall for the next three years as economic growth slows. Bollard said last month he may cut the benchmark interest rates from a record-high 8.25 percent later this year as inflation pressures ease.

``There isn't a lot of confidence in the residential property market,'' Murray Cleland, the institute's national president, said in a statement. Still, ``the market is finding its own level and there is certainly no indication of any significant slump in values.''

The median house price fell 2.2 percent from a year earlier to NZ$340,000 ($258,000). Prices declined NZ$5,000 from May.

Investors are deferring decisions on buying or selling until a clearer trend emerges, Cleland said. Lower prices are being accepted to complete faster sales.

The median time it took to sell a house increased to 53 days, the highest since January 2002, from 49 days in May.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.