13 Jan 2016

House prices show signs of cooling

1:00 pm on 13 January 2016

Housing prices are showing further signs of levelling out as tighter rules for lending and property investment take effect.

Quotable Value's house price index rose at an annual rate of 14.2 percent in December fractionally lower than the near 10-year high of 15 percent reported in November.

House for sale in Upper Hutt.

Photo: RNZ / Alexander Robertson

In Auckland the annual growth rate slowed to 22.4 percent from 24 percent the month before, the second consecutive month that prices have declined slightly.

National spokeswoman at QV, Andrea Rush, said the government's tightening of the tax rules for overseas buyers and property investors and the Reserve Bank's lending restrictions might be starting to bite.

The national average price for a house at the end of last year was $558,146 while in Auckland it was $933,264.

Hamilton house prices increased nearly 20 percent in 2015 and Tauranga's average price was up more than 18 percent.

Ms Rush said Wellington and Dunedin had both seen a spurt in prices in the past three months, with annual growth rates of more than 5 percent, the strongest in nine years.

QV said the number of houses being sold had also risen and there were also signs that first home buyers had either found extra sources of finance to support larger deposits or lowered the price bracket they were trying to buy in.

The property market was expected to remain buoyant for the start of the year at least, with activity traditionally picking up in the New Year.

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