WELLINGTON, Dec 1 (Reuters) - New Zealand house prices grew at the slowest pace in six months in November, the government valuer said on Thursday, signalling some easing of pressure in the red-hot property market.
Quotable Value’s (QV) residential property price index rose 12.4 percent in the year to November to an average price of NZ$624,675 ($442,207.43). That was the slowest rate since May and down from a peak of 14.6 percent in August.
Home values have soared in the past two years, driven by strong migration and low interest rates. While welcomed by homeowners it has been a headache for the central bank which fears severe fallout for the economy if there were a sharp downturn in prices.
The index is now 50.8 percent above the previous market peak of late 2007, according to QV.
Encouragingly for the central bank, there were tentative signs of a cooling in Auckland, the country’s most populous region, which has been the epicentre of home inflation.
Prices grew 12.8 percent in the year to November, the slowest pace since early 2015, though the average price was still NZ$1 million.
The moderation may be a sign that ramped up loan-to-value restrictions introduced by the Reserve Bank of New Zealand (RBNZ) earlier this year were starting to work.
The bank cautioned in its financial stability review on Wednesday that the slowdown may be temporary and it would consider tightening rules on debt-to-income multiples if it saw house price growth pick up again.
Shayne Elliott, CEO of ANZ, one of the country’s largest lenders, said at a Reuters event on Wednesday that there were simply too many buyers chasing too few homes in Auckland.
“You’ve got massive migration and you’ve got a geographically constrained city,” Elliott said. (Reporting by Charlotte Greenfield; Editing by Eric Meijer)