New Zealand house prices fell from a record high, the first drop in three months, as caution among buyers caused sales to slow, a private report showed.
Prices dropped 0.7 percent in July after rising 1.7 percent to a record high in June, according to an index from the Real Estate Institute of New Zealand. Prices gained 1.3 percent in the three months through July and 5.2 percent from a year earlier, the Auckland-based institute said in an e-mailed report.
Investors and the central bank are monitoring the housing market to gauge how quickly inflation pressures may grow in the New Zealand economy. Rising unemployment and a slower-than-expected increase in wages during the second quarter are adding to the case for policy makers to keep interest rates at a record-low 2.5 percent until next year.
House sales rose 19.9 percent from July last year to 5,907, today’s report showed. After adjusting for seasonal influences, sales were little changed from June, the institute said.
“We are seeing recovery rather than boom conditions,” Helen O’Sullivan, chief executive officer at the institute, said in the statement. “Buyer caution is evident.”
It took 38 days to complete a sale in July compared with 37 days in June and 42 days in July last year.