Reduced immigration to New Zealand and high interest rates have cooled the New Zealand housing market.

A report released by Quotable Value New Zealand Ltd, the government valuation agency shows prices climbed 10% in December from a year earlier down from 11.4% in November - the slowest pace in 9 months. The average New Zealand sale price also eased to $388,253 (£154,084) this month down from $393,198 (£156,056) last month.

Reserve Bank of New Zealand Governor, Alan Bollard, increased interest rates four times in 2007 taking the benchmark rate to 8.25%. The cost of borrowing combined with a reduced number of people emigrating to New Zealand has softened demand and according to QV spokesperson Bruce Hancock - "there is nothing in our statistics to suggest this trend will not continue into 2008".

The number of permanent migrants settling in New Zealand exceeded departures by just 6,588 in the year through November, the smallest increase in two years.

Dec. Nov. Oct. Sept.
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National 10.0% 11.4% 12.7% 13.2%
Main Urban Areas 10.4% 11.6% 13.1% 13.5%
Auckland Region 10.8% 11.8% 12.8% 13.3%
Wellington Region 12.1% 13.6% 15.9% 16.3%
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