SOURCE NZ Herald
5.00AM Monday January 14, 2008

Residential property prices rose at a slower pace in December for the fourth consecutive month, a trend expected to continue this year, according to national valuer QV.

Property values rose 10 per cent for the December year, slowing from growth of 11.4 per cent in November and a year high of over 13 per cent in August.

The average national residential sale price fell to $388,253 from $393,198 in November. It was more than $400,000 in October.

Rising mortgage lending rates and slowing immigration had softened demand since August’s high, QV spokesman Blue Hancock said.

“There is nothing in our statistics to suggest that this trend will not continue into 2008, with the spring market having failed to provide the usual resurgence,” he said.

Several banks recently raised mortgage lending rates, with Westpac increasing its two-year fixed rate mortgage to 9.6 per cent from 9.4 per cent on Saturday.

Rates were around 8 per cent two years ago.

Most economists polled by Reuters expect the Reserve Bank to keep its official cash rate steady at 8.25 per cent until late this year or early next, when it is expected to cut rates.

Values rose in Auckland City by 9.1 per cent, in Christchurch by 8.2 per cent, and in Dunedin by 6.9 per cent, all down between 1.5 and 1.7 percentage points from November.

- NZPA