WELLINGTON, July 5 (REUTERS) - Prices for New Zealand homes grew at their slowest annual pace in more than two years, as previously sizzling demand was crimped by regulatory curbs, government property valuer QV said on Wednesday.
Quotable Value’s (QV) residential property price index rose 8.1 percent in the year to June, the slowest since March 2015, compared with an annual rate of 9.7 percent in the previous month.
The index is now 54.2 percent above the market’s previous peak in late 2007.
The Reserve Bank of New Zealand (RBNZ) has raised concerns about the nation’s soaring home prices and has talked up the systemic risk posed by high mortgage debt in the event of a collapse in the property market. The central bank reiterated its worries last month, saying the moderating price growth could be temporary.
The latest slowdown was driven by stricter lending rules introduced by the RBNZ last year, including loan-to-valuation ratio (LVR) limits, to insulate banks from any housing downturn, QV said.
In the previously red-hot city of Auckland, prices grew 7.2 percent on an annual basis, the slowest since September 2012, and compared with 9.3 pct annual rise of in May.
“High prices coupled with banks’ stricter lending criteria are making it increasingly difficult for anyone but cash buyers or those with higher levels of equity to buy property,” said Andrea Rush, QV National spokeswoman in an emailed statement.
Reporting by Charlotte Greenfield; Editing by Shri Navaratnam