Investment houses 'back to fair value'

House prices have fallen below a fair price that investors should be willing to pay - the first time this has happened since late 2006 - says the Westpac Bank.

Westpac economist Doug Steel told an Auckland regional job summit yesterday that house prices were now "around fair value" based on rents, interest rates and other costs.

"The negative sentiment towards housing is overblown," he said.

"That's not to say everyone should leap into the housing market. Our view for house prices is that they will drop by 5 per cent in 2009 and stay flat in 2010, but I think that is more positive than many."

House prices had fallen 8 per cent since their peak in late 2007, so they had already lost more than half of their likely total drop in value.

To read the full NZ Herald article click here

Posted: 24 Mar 2009

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