MIDDAY UPDATE: House prices climb to new high as sales soar

By Paul McBeth

Nov. 9 (BusinessDesk) - New Zealand house prices rose to a record-high last month as the number of sales took off, according to Real Estate Institute figures.

The median sale price rose to $380,000 in October from $371,000 a month earlier, as the number of sales jumped by a third to 6,640 from the same month a year ago. The strength in the market wasn't limited to Auckland and Christchurch as has been the case for much of this year, and makes life harder for the Reserve Bank which has to consider potential asset price bubbles without stifling a stagnant economic recovery.

Auckland's housing market has been showing signs of life this year after property spent a couple of years in the doldrums after the global financial crisis and collapse of New Zealand's lower tier lenders dried up available credit and encouraged households to repay their loans.

Infratil writes down British airports up for sale

Wellington-infrastructure investor Infratil wrote down the value of its Glasgow Prestwick and Kent airports by $43.9 million after getting feedback from potential buyers of the gateways.

The firm has been trying to sell the unprofitable airports, and has already written down their value by $60.4 million in the past two years. The writedown comes as Infratil prepares to publish its first-half earnings next week.

The shares were unchanged at $2.19 today.

Solid Energy board shuffle begins

The shake-up of state-owned coal miner Solid Energy's board has begun with deputy chair John Fletcher and director Michelle Smith departing before their terms have expired, and Australian mining expert Neville Sneddon was added to the board.

Solid Energy's board has been lined up for a reshuffle after the company cut its workforce by a quarter when it found it was facing a $200 million revenue shortfall.

Chief executive Don Elder said the rapid deterioration in international coal prices led to the shortfall, and has managed to keep his job so far.

Chairman John Palmer resigned earlier this year, and was replaced by Mark Ford, who led the government's Auckland super-city merger.

Trinity tax case comes to an end as Supreme Court backs taxman again

The long-running tax dispute involving up to $3.7 billion of deductions over five decades has come to a close with the Supreme Court throwing out claims the Inland Revenue Department fraudulently won its original case in the 'Trinity' forestry scheme.

The court bench, comprising Chief Justice Sian Elias and Justices Andrew Tipping, John McGrath, William Young and Thomas Gault, upheld an appeal by the Commissioner of Inland Revenue, and restored a High Court decision maintaining the tax department's interpretation about tax deductions made by the scheme's investors. The decision was delivered by Justice McGrath in Wellington today.

A group of Trinity investors, including the scheme's architect Garry Muir, claimed the IRD "deliberately refrained from putting material facts and law" before the High Court in the original proceeding, "so as to secure a judgment that department officers knew would not have been available if there had been full and frank disclosure of the legal position," the judgment said.

Because the investors challenged the legal correctness of a Supreme Court ruling, underpinned by the allegation of fraud, it erred in filing a new proceeding in the High Court, the judgment said.

(BusinessDesk)

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