NZ houses among world's priciest

By Brendan Manning

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International statistics from The Economist magazine have found New Zealand house prices are among the most overpriced in the world.

But a local real estate representative says while there isn't a high volume of Tauranga properties on the market currently, they are affordable to buyers at all levels.

Ross Stanway, chief executive of Realty Services, which operates Bayleys and Eves, said there were fewer listings coming on to the market.

Prices had remained stable for six to nine months and if anything the trend was marginally upwards, he said.

"Particularly in the median and below price ranges, there's just this positive creep if you like.

"At the top end of the market [$1 million plus] that's not the case and now probably there's just a slight increase in sales."

Mr Stanway said first-time buyers had been particularly active and so had investors coming back into the market.

The national median house price took an $11,000 fall in July to $361,000, after a record high of $372,000 in June.

The Economist magazine, which tracks price movements in 21 countries, said years of dizzying ascents were coming to an end for much of the world. But its chart showed New Zealand was bucking the trend.

The magazine rated our house prices compared to rents and incomes.

Compared to the amount of rental income our houses generate, we rank second most expensive in the world; New Zealand homes are 66 per cent over-valued, behind Canada. When compared to disposable incomes, our houses are 22 per cent over-valued, or sixth on the list.

House sales lifted in almost every region last month, with overall volumes jumping 20 per cent from a year ago, according to latest figures.

Real Estate Institute of New Zealand data showed there were 5907 unconditional sales in July, a 19.9 per cent jump compared with the same period last year, but a 3.7 per cent fall from June.

The average selling price for a house in Tauranga in July this year was $359,500, up 7 per cent from last year, and up 2.7 per cent from 2008.

On average it took 63 days for a house to sell in Tauranga, compared with 64 days last year.

About 110 houses were sold in Tauranga in July.

Mortgage interest rates are currently at a low as banks compete for loans.

ASB economist Jane Turner said mortgage rates had only just moved off the lowest levels in 10 years, with floating rates at 40-year lows.

"The reason for this weakness reflects the slow economic recovery we're having in New Zealand and the continuing risks that are coming from offshore, particularly from the eurozone debt crisis."

- BAY OF PLENTY TIMES

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