WELLINGTON, Dec 7 (Reuters) - New Zealand’s house prices jumped in November, picking up from a lull during the turbulent election period, the government property valuer said on Thursday.
Quotable Value’s (QV) residential property price index surged 6.4 percent in the year to November, dramatically picking up the pace from a five-year low of 3.9 percent the previous month.
The price surge was at odds with the new centre-left Labour government’s plans to take some of the heat out of the housing market, including a ban on foreign buyers due to take effect in the new year.
The index is now 60.4 percent above the market’s previous peak in late 2007.
Most of the gains were in smaller cities dominated by local buyers including the capital of Wellington, where prices rose 9.8 percent and in Dunedin which saw values jump 13.1 percent. Auckland, the country’s commercial centre and a favourite for foreign buyers remained sluggish, falling 0.5 percent on an annual basis. Nevertheless, on a quarterly basis values picked up a little, rising 0.4 percent.
The nationwide jump was in part thanks to seasonal factors, QV said, as the busier spring and summer season got underway and the impact of September’s general election eased.
The rate of growth suggested the country’s house price boom was not completely over yet, despite the central bank this month predicting house prices would continue a slowdown that began at the start of this year.
That prompted the bank to announce it would ease back its macro-prudential mortgage lending curbs at the start of 2018.
“The easing in loan to value ratio restrictions in January and retail banks lending criteria is likely to help improve activity and demand in housing the market as we move through the summer months,” QV spokeswoman Andrea Rush said in an emailed statement. (Reporting by Charlotte Greenfield)