Australian shares set for strong week on easier monetary policy; NZ at record high

* ASX about 100 points shy of record high

* Local trade subdued ahead of U.S. data

* Property stocks set for large weekly gains

July 5 (Reuters) - Australian shares edged up on Friday and were set for strong weekly gains as easier monetary policy and recent strength in commodity prices helped lift the largest sectors on the index.

The S&P/ASX 200 index tacked on 0.1% or 7 points to 6,723.80 by 0157 GMT. The benchmark was on track to gain 1.6% for the week and was a few 100 points shy of a record high touched in 2007. On the whole, volumes were a fifth of their 30-day average as the U.S. Independence Day holiday on Thursday provided few trading cues, while many investors were sidelined ahead of a key U.S. payrolls report due later in the day.

Financial and real estate stocks led the way, cheered by a lowering in borrowing costs as the Reserve Bank of Australia (RBA) cut interest rates twice in the past two months, and is expected to ease further.

The lower rates are seen boosting demand for a housing market that has been hit by a lengthy downturn, with bank stocks also set to reap some of the benefits from increased home loan volumes.

Three of the country’s big four banks rose in the range of 0.1% to 0.7%, with Commonwealth Bank of Australia leading gains.

The banks pushed up the financial subindex 0.4%, on course for a 0.8% rise for the week.

Scentre Group and Goodman Group, the largest real estate stocks in the ASX 200, rose about 1.2% and 0.9%, respectively. Scentre was set for its best week ever, adding nearly 7%, while Goodman was slated to gain 5.7%.

The sector was also bolstered by the Australian prudential regulator confirming looser mortgage lending rules.

On the downside, mining stocks pulled back from a recent rally. BHP Group and Rio Tinto dropped 1% and 1.8%, respectively.

The two stocks had clocked large gains earlier in the week, tracking strength in iron ore prices.

Fortescue Metals Group, the fourth-largest iron ore miner in the world, fell 2.4%.

New Zealand shares hit a fourth consecutive intraday record, with utility stocks providing the most support. The benchmark S&P/NZX 50 index added 0.3% or 33.92 points to 10,592.20.

The benchmark was set for a fourth straight week of gains.

Meridian Energy, the country’s largest electricity retailer, rose 2.7%.

Fonterra , the world’s largest dairy producer, bounced nearly 6% after plunging to a record low on Thursday. Earlier, the company said there were no new operational developments that could have triggered a drop in its shares to record lows the previous day, but that its “performance is not where it needs to be”.

Reporting by Ambar Warrick in Bengaluru Editing by Shri Navaratnam