Residential property prices in New Zealand fell to their lowest level in more than two years in the first quarter of this year and are down -9.3% on a year before, according to Quotable Value New Zealand, the Government valuation agency.

Prices were down -1% and it is the fifth quarter in a row that prices have fallen. Prices in main urban areas fell by -0.3% and in Auckland, the most populous city, they were down by -0.2%, the index shows. But it is hoped that the increased lending limits on a loan scheme for first time buyers in New Zealand will help boost the countrys property market.

Like many established property markets, first time buyers are regarded as the key to improving sales and bringing the sector out of the doldrums.

Officials are poised to announce that lending limits for ‘Welcome Home’ loans are to increase next month. The current loan limit of $280,000 is expected to be increased to between $320,000 and $350,000. The income limit to qualify for the loan will not be increased and will remain at $85,000 for one or two borrowers. The scheme has been regarded as a huge success.