New Zealand’s House Prices Rose for a Fourth Month

By Tracy Withers

Sept. 7 (Bloomberg) -- New Zealand house prices rose for a fourth month in August, signaling the property market is recovering and may help the economy emerge from a recession.

Prices rose 0.7 percent from July and have gained 1.9 percent from a low in April, Quotable Value New Zealand Ltd., the government valuation agency, said in an e-mailed report.

Rising consumer confidence, housing demand and immigration are helping New Zealand recover from its worst recession in three decades. Finance Minister Bill English said last week he expects the economy will start growing in the second half of this year.

“The housing market is strongly driven by confidence and that appears to be returning to the wider market,” Glenda Whitehead, valuation manager at Wellington-based Quotable Value, said in the report.

Consumer optimism surged to an 18-month high, according to a Roy Morgan Research poll of 1,026 people taken in the two weeks ended Aug. 31. Forty-two percent of those surveyed expect the economy will improve over the next year, the Melbourne-based company said in an e-mailed statement.

Annual immigration growth accelerated to the highest level in more than two years in July, while house sales rose 34 percent from a year earlier.

House prices slumped last year amid a credit crisis and a plunge in consumer confidence. Price in August remained 7.9 percent lower than a year earlier, today’s report showed.

A shortage of houses being offered for sale has helped fan prices, said Whitehead.

“The recent increases in values are a temporary surge caused by the imbalance between motivated buyers and a shortage of properties available for them to buy,” she said. “If more properties come on to the market as expected, this imbalance could be corrected and values should stabilize.”

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