WELLINGTON, May 30 (Reuters) - New Zealand’s banking system could withstand a decline in home prices, according to the central bank, as the real estate market begins to show signs of cooling after years of runaway growth.
The Reserve Bank of New Zealand believes the system could withstand a relatively significant decline in house prices, Bernard Hodgetts, head of the bank’s macro-financial department, told a parliamentary committee in Wellington on Wednesday.
House prices have risen more than 50 percent nationally over the past 10 years, and almost doubled in Auckland, New Zealand’s largest city, while household debt levels have soared. In recent months home values have cooled. (Reporting by Charlotte Greenfield and John Mair; Editing by Kim Coghill)