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Housing Market Will Withstand Rates Rise

Media release, for immediate release, 29 January 2004

HOUSING MARKET WILL WITHSTAND RATES RISE

The Christchurch real estate market is strong enough to withstand the Reserve Bank's increase in the Official Cash Rate, according to a leading Canterbury real estate firm.

Director of Simes Ltd, Peter Cook, says the 0.25% increase to 5.25% is a very small rise.

"The housing market is still exceptionally strong as illustrated by the latest December figures, which show an increase in both volume of sales and the median house price. With the market still experiencing a huge demand for properties, we don't believe this small rise in the OCR will have any measurable impact," says Peter Cook.

"People haven't been buying with their eyes closed. Given low interest rate levels, people are likely to have anticipated a rise in interest rates at some stage."

Last month the median property price in Christchurch City was $212,000, up from $200,100 in November and a $42,000 increase on the December 2002 median price. There was also an 8.2% increase in the number of houses sold when compared with the previous month.

ENDS

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