WELLINGTON, June 1 (Reuters) - New Zealand’s housing market cooled in May to post the slowest growth in two years, government property valuer QV said on Thursday.
Quotable Value’s (QV) residential property price index rose 9.7 percent in the year to May, compared with an annual rate of 11.1 percent in the previous month.
The index is now 53 percent above the market’s previous peak in late 2007.
New Zealand’s soaring house prices have raised concerns at the Reserve Bank of New Zealand (RBNZ) about high mortgage debt and the systemic risk that it poses were the market to collapse, although the bank said on Wednesday it was encouraged that prices appeared to be cooling.
Stricter lending rules introduced by the RBNZ last year, including loan-to-valuation ratio (LVR) limits, to insulate banks from any housing downturn were behind the slowing growth.
“Nationwide value growth continues to ease back due to lower demand in the housing market caused by the latest round of LVR restrictions and tougher lending criteria from the banks as we head into the winter period,” said QV spokeswoman Andrea Rush.
House prices in the Auckland region were up percent 9.3 percent in the year, the slowest growth since November 2014, and they were largely flat, rising 0.1 percent, in the three months to the end of May.
Reporting by Charlotte Greenfield; Editing by Eric Meijer