May 14 (Bloomberg) -- New Zealand house prices rose at the fastest pace in nine months in April, buoyed by jobs growth and immigration, suggesting the central bank will keep interest rates at a record high this year.

House prices surged 10.6 percent in April from a year earlier, according to a report released in Wellington today by Quotable Value New Zealand Ltd., the government valuation agency. That's the largest increase since an 11.1 percent gain in July.

Rising house prices may encourage consumers to borrow more, which could fan spending and inflation. Reserve Bank Governor Alan Bollard raised the official cash rate in April to a record 7.75 percent, saying a housing boom, rising immigration and a tight labor market were stoking demand in the economy.

``The market has continued unabated over the last month on the back of stronger-than-expected migration and high levels of employment creating steady demand, especially in the lower end of the market,'' Quotable Value spokesman Blue Hancock said in the statement.

Permanent migrant arrivals increased to a four-month high in March, according to government figures released on April 20. New Zealand companies hired 25,000 extra workers in the first quarter, the statistics agency said May 10.

Thirteen of 14 economists surveyed by Bloomberg News expect Bollard will leave the benchmark interest rate unchanged this year. One expects a rate increase in the third quarter.

Following is a table of the percentage change in national house prices and prices in urban areas, in Auckland and in Wellington.

                     April       March       Feb.       Jan.
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National             10.6%       9.8%        9.3%       8.8%
Main Urban Areas     10.3%       9.4%        8.7%       7.2%
Auckland Region       8.2%       7.5%        6.9%       6.3%
Wellington Region    14.7%      13.5%       12.8%      12.4%
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To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

Last Updated: May 13, 2007 08:01 EDT