House prices surge in spite of loan restrictions
Wednesday Mar 5, 201
level of listings is keeping the market tight, especially in Auckland, says expert.
New tighter lending restrictions don’t appear to have done anything to stop prices rising according to one economist, and the country’s biggest house sale website has recorded record-level buyer interest.
ASB economist Daniel Smith, who analysed data from realestate.co.nz, said listings in the city fell 4 per cent in the five months since the rules came in, compared to the previous five months.
That’s despite a surge in listings in October, the first month of the Reserve Bank’s limits where a 20 per cent deposit is required from most new residential mortgage lending customers.
“While the restrictions have marginally dented demand, they may also have scared off potential sellers,” Mr Smith said.
“The low level of listings is keeping the market tight, especially in Auckland. That is likely to maintain upwards pressure on house prices, especially given strong inwards migration, especially in Auckland and the tentative rebound in sales activity seen since the turn of the year.”