New Zealand house prices show rise

Wellington: New Zealand house prices increased in October, adding to signs that record-low interest rates are helping the property market recover.

Prices rose 1.3% from September, the Auckland -based Real Estate Institute of New Zealand Inc said. Prices have surged 9.4% since hitting a three-year low in January.

New Zealand variable home-loan interest rates are at a 41-year low as Reserve Bank Governor Alan Bollard has kept the benchmark borrowing cost at a record-low 2.5% since April. Gains in the housing market may prompt the central bank to start raising interest rates as early as the first quarter next year, economists say.