Bollard's house price warning

In a wide-ranging speech about property yesterday, Dr Bollard warned that house prices were not likely to rise much more in the next two years and could fall.

Dr Bollard's latest property price warnings came just as Australian figures showed national house prices suffered a record 1.2 per cent quarterly fall, and down more than 5 per cent in Sydney and 3 per cent in Canberra.

Many countries, including Australia, the United States, Britain and Ireland have all seen strong house price rises in recent years.

"In many cases their upturns started a little earlier than New Zealand's and the subsequent cooling seems a little more advanced," Dr Bollard said.

The common factor among the house price boom countries was the "investment motive". Housing was seen as a preferred alternative to other forms of savings and investment, with an "aversion" to shares or superannuation.

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