Media release, for immediate release, 29 April 2004
HOUSING MARKET WILL REMAIN STRONG DESPITE RATE RISE
Today's rise in the Official Cash Rate is not expected to have any identifiable effects on the local housing market,
according to a leading Canterbury real estate firm.
Director of Simes Ltd, Peter Cook, says the 0.25% increase to 5.5% was not unexpected.
"The rise is no more than a fine-tuning measure to balance economic factors. As we predicted, the January rate rise had
no measurable impact on the housing market. This rate rise will be no different," says Peter Cook.
In announcing the rate rise, Reserve Bank Governor Alan Bollard said despite data that suggested a cooling in activity
in the housing market, pricing pressures remain strong.
"This disproves those pessimists that were talking down the market earlier this year. The housing market is still
experiencing very strong demand and achieving high sales volumes and prices, as people recognise residential housing as
still being fundamental to their wellbeing. With increased business prosperity, lower immigration and enhanced
opportunities for exporters due to the decreasing exchange rate, job security should remain high. This provides
continued certainty for purchasers and their ability to service debt, and that will keep the housing market buoyant."
Last month the median property price in Christchurch City was $227,000, up from $220,000 in February and $175,000 in
March 2003. There was also a 17% increase in the number of houses sold when compared with the previous month.
ENDS