New Zealand house prices rise fastest in 10 months, new bank lending rules in focus

Housing prices in New Zealand rose at the fastest pace in almost 10 months during August, less than a month farther from the imposition of new bank lending rules on residential properties. Also, the largest city of Auckland witnessed the average price of a house topping the million dollar mark for the first time last month.

National house prices in Australia rose 14.6 percent year-on-year last month, up from 14.1 percent in July, marking the quickest pace of rise since Nov 2015, data released by Quotable Value, a government-owned property research company showed Tuesday.

Further, house prices in the Auckland region rose 15.9 percent on the year and are now 85.5 percent higher than the previous peak. In Auckland, which has been a focal point of the RBNZ’s concern, prices rose 14.3 percent to NZD1.18 million.

Moreover, the city of Hamilton witnessed residential property prices surging by 29.3 percent over the past year to an average sale price of NZD518,387 (USD378,725). Wellington, the national capital, saw the second-quickest increase, up 17.7 percent to an average sale price of NZD643,986.

Meanwhile, the Reserve Bank of New Zealand has confirmed the new residential lending regulations that will be applicable to buyers throughout the country, with effect from Oct 1. From next month onwards, investors will generally need a 40 percent deposit for a mortgage loan, while owner-occupiers will generally require a deposit of 20 percent.