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New Zealnd House Prices Show First Drop

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New Zealand has seen its median house price drop by nz$2500 in June.


The national median house price dropped by at least $2500 in June, according to latest figures from the Real Estate Institute.

The drop follows an increase of $45,000 over the last year.

The national median price dropped from $350,000 in May to $347,500 in June, the figures show.

Real Estate Institute president Murray Cleland said the residential market had "cooled its heels".

Mr Cleland put the fall down to cold weather and high interest rates.

He said he believed Reserve Bank governor Allan Bollard would be happy with the figures but that they were unlikely to change the Official Cash Rate.

"We're in a period of wait and see," Mr Cleland said.

He said it was normal for a drop off to occur over the winter months.

The institute has tightened its reporting deadlines for collecting sales figures and Mr Cleland said this may have affected the number of sales by up to 8 per cent, or 600 sales.

But Mr Cleland it had not affected the median prices and there was no doubt the market was pulling back.

The institute's figures differ from those of Quotable Value, which put the national median price at $378,672 in June.

But Mr Cleland said the institute's figures were based on unconditional sales, whereas other figures were based on property settlements, effectively making them six weeks out of date.

There had been falls across seven of the 12 national regions surveyed, he said.

It is not known if the new figures are likely to have an impact on interest rates.

A Reserve Bank spokeswoman said the bank did not comment "mid cycle".

She said the next Official Cash Rate would be reviewed on July 26.

Edited by soldintime

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