New Zealand house prices rose for the second month in a row in December as buyers rushed to beat planned government regulations targeting property speculators. Data from government valuer Quotable Value (QV) on Thursday showed its residential property price index rose 6.6 percent year-on-year last month, picking up pace from the 6.4 percent rise in November.
The robust growth in the final two months of the year was in stark contrast to a slowdown from around the middle of the year as sentiment was dampened by uncertainty over an election in September, which ushered in a new Labour-led government. "This was partly due to buyers delaying purchasing until the election result was decided and may also have been in part due to some buyers racing to purchase before the new foreign buyers' ban," said Andrea Rush, national spokeswoman at QV.
The government has vowed to shake up the property market and introduce a ban on foreign homebuyers in the first few months of 2018. In October, house price growth slipped to a five-year low of 3.9 percent. The December data suggests the country's house price boom has got some life left, despite the Reserve Bank of New Zealand in November predicting a continued slowdown.
The central bank also announced it would ease back its macro-prudential mortgage lending curbs at the start of 2018. "The slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity and demand in housing the market as we move through the summer months," Rush said.
The index is now 61.6 percent above the market's previous peak in late 2007. House prices in the Auckland, the country's commercial centre were 0.4 percent higher in the year to December, compared with a 0.5 percent drop the month before.
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