New Zealand house prices plummet

THE average Kiwi house lost nearly $40,000 last year as the recession and gloomy economic outlook continues to bite.

"Property values have dropped 9.3% over the last year, worse than last month. However, this further decline is being driven by falls across the Auckland region, particularly in Auckland City and Manukau. Many other areas of the country are beginning to see property values flattening, particularly in provincial cities and across parts of the Wellington area," said Blue Hancock of Quotable Value New Zealand Ltd, the Wellington-based government valuation agency.

Falling house prices feels like good news to house-less immigrants or if you're considering buying, but the lack of confidence in the economy makes calling the bottom of the market a difficult task.

As in the UK, many buyers are sitting on their hands, which will only causes prices to fall further.

"Despite signs of stability in property values across some areas of the country, there remains widespread uncertainty over what the coming months may bring. The number of sales traditionally drops during autumn and winter, but how interest rates impact market activity and the extent to which broader economic factors, in particular declining job security, will affect the property market remains unclear," said Hancock.

Central bank Governor Alan Bollard is expected to cut interest rates again this month.