Housing still booming but less frothy

House prices rose an estimated 4% in the three months ended March, the 11th successive quarter in which they have risen and bringing the annual increase to 22%, according to the latest figures from Quotable Value.

The annual increase was down from nearly 24% for calendar 2003 but the quarterly increase for the three months ended December was revised from the previously published 4.9% to 6.3%. That was still below the 7.3% increase recorded in the September quarter.

Blue Hancock of QV Valuations says the June quarter is likely to still show further increases in house values but that the rate of increase is beginning to reduce.

"Important factors like the continued downward trend in net migration and decreasing affordability due to high house-price-to-income ratios could continue to reduce buyer demand in the short term," Hancock says.

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