1 Nov 2016

House price rises ease after new lending rules

2:19 pm on 1 November 2016

The growth in property prices is at its slowest in five months as tighter bank lending rules take effect.

Wellington houses

New LVR restrictions have seen price rises ease overall, but don't seem to have affected prices in Wellington. Photo: CC BY-NC-ND 2.0 Jared Kelly / Flickr

The QV house price index showed an annual rise of 12.7 percent in October, compared with 14.3 percent the month before.

The national average price edged up to $622,309.

QV national spokesperson Andrea Rush said tighter lending measures imposed on banks were slowing activity.

"Sales volumes are down by around 12 percent on the same period last year and mortgage approval rates are also down.

"The new build market remains strong across the country as the new LVR (loan-to-value ratio) restrictions for investors do not apply for new homes," she said.

In Auckland, prices picked up at the slowest rate since March last year, but the average price still sat at $1,045,207.

"Home values continue to rise faster in the Wellington region than the Auckland region, and the housing market in the capital appears largely unaffected by the new LVR restrictions, particularly at the more affordable end of the market in areas such as the Hutt Valley, Porirua and the Kapiti Coast.

"Auckland, Tauranga and Hamilton home values are continuing to rise, just at a slightly slower pace than they were prior to the new LVR measures being introduced in late July," she said.

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