A leading economist believes that property prices in New Zealand may have fallen as far as they will go and that that they could begin to recover in 2011.
This comes after figures show that asking prices in New Zealand rose 1 per cent between February and March 2011.
Prices set to rise by 3 per cent in 2011
Chris Tennent-Brown, economist at ASB Institutional believes that property prices in New Zealand are ââ¬Ëtroughingââ¬â¢ and that they may rise by around 3 per cent this year. He credits lower mortgage rates, population growth and a continuing lack of supply for the increases.
Mr Tennent-Brown said: ââ¬ÅThe fact that the amount of inventory has not been lifting significantly, and has actually declined in recent months, has meant that the overall market has kept the market in better balance than during the recession.ââ¬Â
Urban centres showing strong price increases
Monthly figures from realestate.co.nz, which claims to represent 93 per cent of all listings by New Zealand real estate agents, also showed that new listings rose 8 per cent to 12,247, and the number of unsold houses fell to 51,980 from 52,672 in the previous month.
The figures show a turnaround underway in the major urban centres, while regional data lags behind. Wellington and Auckland both saw asking prices rise in March, with Wellington particularly strong. The 4.1 per cent increase put prices in the city within $2,500 of the peak reached in 2007.
The Northland and Marlborough regions saw the biggest declines in the month, with prices now at record lows.
Canterbury, which accounts for 15 per cent of the property market, saw listings down 36 per cent compared to a year ago. This was mainly due to the February earthquake which caused $15 billion in damage.
