Harcourts welcomes LVR scrap

Harcourts chief executive Hayden Duncan

Real Estate group Harcourts is praising the Reserve Bank for signalling an end to LVR restrictions.

Today deputy reserve bank governor Grant Spencer said the restrictions have slowed house price inflation by about 2.5 percentage points.

He said the earliest time it will consider beginning to remove them late in the year.

Harcourts chief executive Hayden Duncan says LVR restrictions become ineffectual in Auckland as population increases.

Instead they had the most impact in provincial New Zealand, where the market has never been overheated.

Harcourts figures show the average house in New Zealand now sells for $500,852, up 12% on the same time last year and 13% on September, when LVR restrictions were introduced.

Mr Duncan says restrictions have had little effect on overall prices especially in Auckland and Christchurch, while making it temporarily more difficult for first home buyers to break into the property market.

In Auckland the average sales price now sits at a record high of $700,793. This is up 11% on the same time last year. It is also a 13.5% increase on September 2013 figures.

Mr Duncan says sales agents reported a cooling off by first home buyers in Auckland and Christchruch but overall high demand overall average prices have continued to rise.

“First home buyers are now also coming back into the market and are meeting the 20% deposit requirements creatively, through options such as second tier lenders and family borrowing.”

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