WELLINGTON: New Zealand’s housing marketcooled in May to post the slowest growth in two years,government property valuer QV said on Thursday.
Quotable Value’s (QV) residential property price index rose9.7 % in the year to May, compared with an annual rate of11.1 % in the previous month.
The index is now 53 percent above the market’s previous peakin late 2007.
New Zealand’s soaring house prices have raised concerns atthe Reserve Bank of New Zealand (RBNZ) about high mortgage debtand the systemic risk that it poses were the market to collapse,although the bank said on Wednesday it was encouraged thatprices appeared to be cooling.
Stricter lending rules introduced by the RBNZ last year,including loan-to-valuation ratio (LVR) limits, to insulatebanks from any housing downturn were behind the slowing growth.
“Nationwide value growth continues to ease back due to lowerdemand in the housing market caused by the latest round of LVRrestrictions and tougher lending criteria from the banks as wehead into the winter period,” said QV spokeswoman Andrea Rush.
House prices in the Auckland region were up percent 9.3percent in the year, the slowest growth since November 2014, andthey were largely flat, rising 0.1 percent, in the three monthsto the end of May.
(Reporting by Charlotte Greenfield; Editing by Eric Meijer)
Source: Reuters