PHOTO: 123RF – New measures aimed at property investors are likely to see house prices enter a long slowdown, Westpac says, forecasting a 5 per cent drop over the next four years.

House prices will slide over the next four years as new Government policies frighten investors out of the market, one of New Zealand’s largest mortgage lenders is warning.

Westpac has forecast that over the next four years, house prices across New Zealand will drop by 5 per cent, with a slightly larger fall centred around Auckland.

The predicted fall, in sharp contrast to the 30 per cent increase in nationwide house prices seen in the past four years, was expected to spill into the wider economy, as nervous households trim spending.