Housing market slowing, another surge unlikely

"The market may be slowing but it remains quite active," said ASB chief economist Anthony Byett.

"You can't dismiss the possibility of another surge in demand, if the perception gets around that interest rates have peaked and something causes lower fixed rates among the banks."

But the more likely outlook is for a slowing housing market over the next couple of years, he said.

"I know that slower housing activity was generally expected this time last year and that forecast proved incorrect. But the same factors are still there and they will eventually tell."

House prices have risen a startling 74 per cent since the latest boom began in mid-2001.

It has outstripped the 55 per cent rise in the previous upturn (between mid-1992 and the end of 1997) and is equivalent to a 59 per cent rise in real terms.

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