House prices - how far will they fall?

So just how far will house prices fall this year?

That's the question facing many people considering selling, getting their foot on the ladder or simply keeping a watchful eye on New Zealand's biggest investment sector.

Housing's ever-fluctuating fortunes can make or break many of us because 70 per cent of the nations's net worth is tied up there - it is estimated to be worth $600 billion.

The housing boom over the past decade created an affordability crisis which left many people wondering when they would ever be able to afford to own that roof over their heads.

But Quotable Value's November statistics showed a 6.8 per cent decline in house values over the past year - calculated over the three months ending last November and compared with the same period in 2007.

The Real Estate Institute's figures showed a 4 per cent price drop in 2008, a major turnaround after double-digit growth earlier this decade.

Sales volumes suffered the most as buyers held back and sellers took fright. One snapshot showed a 60 per cent volume drop. In November 2003, when the market was ripping ahead, 10,774 residential properties were sold. Last November just 4279 places sold.

To read the full NZ Herald article click here

Posted: 8 Jan 2009

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