Reserve Bank sees further house price falls

The continued housing market slump was one factor cited by the central bank for its decision to leave the OCR at 3%.

RBNZ governor Alan Bollard said "current low interest rates are having a less stimulatory effect than in the past."

"Despite the floating mortgage rate being below its historic norm, activity in the housing market has weakened further."

"While some of this slowing was driven by the earthquake-related disruptions to the Canterbury housing market, reduced turnover was also observed elsewhere in New Zealand. The current level of house sales is consistent with further declines in house prices over the coming months."