WELLINGTON, Sept 1 (Reuters) - New Zealand house prices grew at the lowest rate in five years, the government property valuer said on Friday, as central bank lending restrictions and the quiet buying period in the lead up to the national election curbed activity.
Quotable Value’s (QV) residential property price index rose 4.8 percent in the year to August, the slowest pace since 2012. That compared with annual growth of 6.4 percent the previous month.
“General elections...traditionally compound any annual winter slowdown in the housing market due to uncertainty caused by potential policy changes. So it’s likely this is...a factor in the subdued sales activity,” said QV spokeswoman Andrea Rush in an emailed statement, referring to the country’s parliamentary elections taking place on Sept. 23.
The index is now 54.9 percent above the market’s previous peak in late 2007.
The Reserve Bank of New Zealand (RBNZ) had been alarmed at house price inflation, which at the start of the year was racing ahead in the double digits. The central bank slapped loan-to-value lending restrictions (LVRs) on banks’ lending last year to reduce risk to the financial system, which has also contributed to the slow down.
The RBNZ said on Wednesday it worried that if it removed the LVR rules, house prices would surge again and had also warned in the past that buying activity could ramp up after the elections during the warmer Spring season.
House prices in the Auckland region, previously the epicentre for sky-rocketing house prices, were 2.8 percent higher on an annual basis, the slowest growth in six years. (Reporting by Charlotte Greenfield; Editing by Gopakumar Warrier)