Gains in New Zealand home prices pick up steam

PUBLISHED : Wednesday, 08 July, 2015, 12:00am
UPDATED : Wednesday, 08 July, 2015, 12:00am

Growth in New Zealand's house prices picked up for a sixth month in June on the back of gains in the country's biggest city and surrounding regions, the government property valuer said.

Quotable Value's residential property price index rose 9.3 per cent in the year to June, compared with an annual rate of 9 per cent in May.

The index is now 25.6 per cent above the market's previous peak in late 2007.

"There is a severe shortage of properties listed for sale across all the main centres, and this winter slowdown is dampening activity in some areas while in other areas the lack of listings is leading to increased competition among buyers, which is driving values up," said Quotable Value spokeswoman Andrea Rush said.

House prices in the Auckland region, where there is a significant housing shortage, were 17 per cent higher in the year to June, compared with a 16.1 per cent rise the month before.

The Reserve Bank of New Zealand is imposing new controls on loans to property investors, requiring banks to hold more capital to back such loans and investors borrowing to buy in the Auckland region to have larger deposits.

Rush said there were signs that buyers in Auckland were now chasing properties in neighbouring cities and trying to beat the new controls.

Price growth in earthquake-damaged Christchurch slowed to 3.2 per cent over the past 12 months, compared with 3.8 per cent the month before.