House prices will fall: report

The report, for PMI Mortgage Insurance, says property in Southland and Otago has become overvalued. While prices were likely to rise 20 percent for the year ending in June, they would fall 10 percent in the following two years to June 2006.

Southland's population grew just 0.3 percent between June 2001 and June 2003 while Otago, including the Wakatipu, gained 1.2 percent in the same period.

Overseas migrants inflated the Southland population but there was still a net outflow of people moving to other provinces, mostly Otago and Canterbury, the report says.

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