High New Zealand home prices causing anxiety

AP News
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Posted: Aug 22, 2012 10:13 PM

WELLINGTON, New Zealand (AP) — Rising home prices are often welcomed as a sign of a country's economic health and vigor. But in New Zealand, there is growing concern that prices have risen so high they are acting instead as an economic anchor, sucking resources from those who can afford a home and prompting those who can't to consider moving overseas.

While much of the world remains mired in a housing slump, median home prices in the South Pacific nation in June rose to an all-time high: 6 percent above the peak reached before the global financial crisis and more than double the level of a decade ago.

Median home prices have now risen to more than five times the average income, well above the historic multiple of three.