Provinces next to suffer

First Aucklanders were hit by falling house prices, then the smaller centres. Now it's the turn of our farmers. House prices across New Zealand will keep falling, according to a gloomy economic forecast contained within the Budget.

And ANZ National bank economist Cameron Bagrie thinks the continuing decline, largely city-focused until now, will hit the provinces hard.

"As the global recession filters through to the dairy sector, we'll see falling house prices across the rural region."

Dairy districts, in particular, have been hit by a reduced milk price, which may force some off their farms entirely, and will leave all of them with less spending money. That will hurt everyone in rural New Zealand.

The Treasury blames rising unemployment for a predicted 8 per cent drop in house prices in the year to March 2010, and a further four percentage points in the year to March 2011 - on top of last year's 9 per cent fall.

To read the full NZ Herald article click here

Posted: 31 May 2009

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