(WELLINGTON) New Zealand house prices rose for the third month in July, signalling the property market is recovering and may help the economy emerge from a recession.
Recovery mode: House prices in New Zealand rose 0.7% from June and have gained 1.3% from a low in April, according to a new reportPrices rose 0.7 per cent from June and have gained 1.3 per cent from a low in April, Quotable Value New Zealand Ltd, the government valuation agency, said in an e-mailed report.
Reserve Bank governor Alan Bollard last month kept the benchmark interest rate at a record-low 2.5 per cent and said he is unlikely to raise borrowing costs until late 2010.
Rising consumer confidence, housing demand and immigration are helping New Zealand recover from its worst recession in three decades.
'There are signs that more vendors are putting their properties on the market,' Glenda Whitehead, valuation manager at Wellington-based Quotable Value, said in the report. 'This is perhaps in response to reports of shortages of listings and signs that values have stopped declining.'
House prices slumped last year amid a credit crisis and a plunge in consumer confidence. By March, prices were 9.3 per cent lower than a year earlier.
In July, prices were 5 per cent lower than a year earlier, yesterday's report showed.
New Zealanders are more optimistic about the housing market, with 27 per cent of 600 people surveyed in July saying they expect prices will rise, ASB Bank Ltd said in a report last week.
Sixty-four per cent said it was a good time to buy a home. Annual immigration growth accelerated to the highest level in more than two years in June, while house sales rose 40 per cent.
Consumer confidence rose to an 18-month high in the second quarter, according to a survey by Westpac Banking Corp and McDermott Miller Ltd. -- Bloomberg
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