WELLINGTON, Nov 2 (Reuters) - New Zealand house values grew at their slowest pace in five years in October, with the commercial hub Auckland suffering a price decline for the first time since 2011, the government property valuer said on Thursday.
Quotable Value’s (QV) residential property price index rose 3.9 percent in the 12-months ending October, compared with an annual rate of 4.3 percent in the previous month.
The sluggish growth came during a period of political uncertainty after an inconclusive September election resulted in coalition negotiations until Oct. 19 when the leftwing Labour Party was able to form a government.
The central bank has cautioned that cooling prices in the previously red-hot property market could be temporary and that it would wait until after the election to gauge trends in the sector.
QV’s index is now 56.1 percent above the market’s previous peak in late 2007, with the property market driven up by a boom in immigration, a robust economy and low housing stock.
House prices in the Auckland region fell for the first time in six years, edging down 0.6 percent, compared with a 0.8 percent rise the month before.
“In general there appears to be a trend of slowing in the rate of growth with the frenzy induced by high numbers of investors in the market subsiding and a return to more normal levels of activity in housing market around the country,” said QV spokeswoman Andrea Rush, in an emailed statement.
House prices boomed at double-digit pace at the start of 2017, but eased off through the year as central bank restrictions on lending dulled investor demand.
The government this week announced further restrictions in the housing market, saying it planned to implement a ban on foreign owners of existing homes by early 2018.
Both the government and the real estate industry have said they do not expect a significant impact on house prices from the ban.
Reporting by Charlotte Greenfield; Editing by Shri Navaratnam