Rob Kerr - The Timaru Herald

It's gloom and doom for house prices in the north, but South Canterbury should fare better. Rob Kerr reports.

Economists' predictions of New Zealand house prices falling 10 to 15 per cent, do not ring true for this region, according to South Canterbury Real Estate Institute president Warwick Jones.

Even if this prediction were valid, it applied to a national average, Mr Jones said

It included more volatile markets such as top-end property and the over-supplied Auckland apartment market.

The province's houses were valued well below the national average and he felt they were realistically priced.

There were still good levels of employment and he was seeing people coming to buy houses in the region.

He was unaware of any people facing mortgagee sales.

Mr Jones would not give a figure by which the average house may drop in value -- he was opposed to "crystal ball gazing".

Mr Jones did not believe a fall in house prices was inevitable, but a period of static house prices was a pattern he had seen before.

The market had been overheated and now it had softened.

Reserve Bank governor Allan Bollard has made a prediction for average house prices to fall by 5 per cent.

The Bank of New Zealand's chief economist Tony Alexander has predicted a fall of between 10 and 15 per cent.

Both of these predictions see the market as 30 per cent overvalued.

The downward pressure caused by rising interest rates will remain a factor until December, according to Mr Alexander.

After this he predicted first home buyers would be able to take advantage of greater choice and a fall in prices.

Although prices would eventually rise again Mr Alexander did not expect this to happen for some time.