Property price rises cool off
Property price rises have eased for the first time since March but experts say it is still too early to signal a market slowdown, despite interest-rate increases and falling investor returns.
Tuesday, November 15th 2005, 12:37AM
by The Landlord
The latest Quotable Value residential price movement report shows property values rose 14.5 per cent for the 12 months to October, down from 14.9 per cent growth to September.The figures come as the Government looks at ways to curb lending, such as limiting the amount of money banks can lend on a property's value, to cool the housing market.
The Reserve Bank is worried that interest-rate rises are not flowing through to mortgage lending, which continues to stoke inflation.
Quotable Value spokesman Blue Handcock said that to be certain the market was slowing down, there needed to be a consistent trend downwards in growth.
"Regardless, we do expect at least a levelling of growth in the property market given expected interest rate rises, falling investor returns and also a slowing population growth rate," he said.
David Tripe, Massey University's head of banking studies, said there was little difference between the September and October figures and no signs of a big slowdown in banks' housing lending.
He had stopped predicting a cooling in the housing market but warned that people who expected a continual increase in prices were unrealistic.
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