November 14, 2017 / 9:25 PM / a year ago

UPDATE 1-Auckland house prices see biggest annual fall since 2010

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WELLINGTON, Nov 15 (Reuters) - House prices in Auckland saw their biggest fall in nearly seven years in October and the number of properties sold across New Zealand also fell, data showed on Wednesday, in the latest sign that the housing market is losing steam.

House prices in New Zealand rose 3.3 percent annually on a seasonally adjusted basis but fell 3.2 percent in Auckland - the biggest fall since December 2010, the Real Estate Institute of New Zealand (REINZ) said.

House prices have risen more than 50 percent nationally in the last 10 years, and almost doubled in the city of Auckland, but have more recently cooled as a slowing economy and home loan restrictions curbed demand.

“It’s clear that the volume of properties sold across the country is still significantly lower than it was this time last year,” said Bindi Norwell, CEO at REINZ.

Amid a cooling housing market, the central bank had come under some pressure to rethink the loan-to-value restrictions that had been put in place when the market was overheated.

“Therefore, we welcome the Reserve Bank’s comments last week that they will make an announcement later this month around reviewing the restrictions and the criteria that they would adopt for the removal of LVRs.”

On a monthly basis, house prices rose 1.2 percent in New Zealand and were up 0.8 percent in Auckland.

In September, the number of properties sold fell to its lowest for that month in six years, which REINZ said was partly due to an “election effect”.

New Zealand had an inconclusive election on Sept. 23, resulting in lengthy negotiations which led to a formation of Labour-New Zealand First coalition government nearly a month after the day of the vote. (Reporting by Ana Nicolaci da Costa; Editing by Angus MacSwan)

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