New Zealand pretty much follows Australia. Our house prices have been falling, although not as much as one might expect, especially considering how shite the wages are over here.

Apartment prices in the luxury beachside Australian town of Noosa Heads have tumbled by a fifth since 2008 as cracks emerge in a housing market that’s so far escaped the rout seen in the U.S., U.K. and Ireland.

The median apartment price in the tourism and retiree town 150 kilometers (93 miles) north of Brisbane has slumped 21 percent in three years to A$570,000 ($594,000), according to the Real Estate Institute of Queensland. Sales have more than halved across Queensland state’s Sunshine coast, home to “Crocodile Hunter” Steve Irwin’s Australia Zoo, and the Gold Coast, known for its surfing beaches and casinos.

“We have a very overvalued housing market and even a small adverse shock can be magnified by a large adverse impact on property values,” said Gerard Minack, Sydney-based global developed markets strategist at Morgan Stanley (MS), who asserts Australian home prices are as much as 40 percent overvalued. “We’re seeing that now in parts of Queensland.”

Economists and analysts at organizations including RP Data, Australia & New Zealand Banking Group Ltd. (ANZ) and Westpac Banking Corp. (WBC) have said the weakness in home prices along Queensland’s southeastern coast is unlikely to spread as low unemployment and a shortage of homes underpins prices.

“A lot of sellers are cutting prices and are preparing to meet the marketplace,” said John Newlands, Gold Coast spokesman for the real estate institute and principal at an LJ Hooker franchise in Surfer’s Paradise, a northern Gold Coast suburb that’s home to the world’s tallest residential tower. “In 2011, more investors will start to come back into the marketplace as prices fall.”

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