New Zealand residential property values continued to push higher in December but the rate slowed in some areas as tighter lending restrictions continue to bite.
The average value of a New Zealand home rose 12.5 percent to $627,905 in December versus the same month a year earlier, data from state-owned valuer Quotable Value showed.
Record migration and low interest rates have bolstered the country's housing market, prompting the central bank to tighten up lending rules to reduce the risk to the nation's financial stability. New restrictions on lending to property investors with high loan-to-value ratios came into play Oct. 1, taking some of the heat out of the market.
"December saw a continuation of the trend of a slowing rate of value growth, activity and demand. This trend has been seen in many of the main centres since the introduction of the LVRs, which require a minimum 40 percent deposit for investment properties," said QV's national spokeswoman Andrea Rush.
Rush noted the possibility the central bank might lift interest rates in 2017 may mean some investors choose not to buy property given lower expectations for capital gain. However, any slowdown will be offset by the strong net migration, relatively low interest rates and a lack of supply, particularly in the nation's largest city of Auckland, she said.
Growth in Auckland house values increased at a 12.2 percent annual pace in December, the slowest rate since January 2015, taking the average value for the Auckland region to $1.05 million. While the rate of growth is slowing, values are still 91.6 percent higher than the previous peak of 2007.
Wellington regional house values increased 20.5 percent to $574,410. QV noted that while the investor market has slowed marginally since the middle of the year, first home buyers remain "very active" and seem to be taking advantage of the fact there are fewer investors in the market.
In other urban centres, Hamilton values rose 20.4 percent on the year to $534,860, Tauranga rose 24 percent to $672,197, Dunedin lifted 14.6 percent to $354,133, and Christchurch rose 2.5 percent to $494,247.
Napier values gained 20.7 percent to $415,189, Hastings increased 20 percent to $387,133, and Nelson advanced 16.6 percent to $499,866, while values in Queenstown were up 31.6 percent to $1.02 million. The only place where house prices declined was Buller, on the West Coast of the South Island, where house prices slipped 1.9 percent in December on the year.
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