House prices still rising in spite of loan restrictions

The new loan to value (LVR) restrictions, where a 20 per cent deposit is required from most new residential mortgage lending customers, don't appear to have done anything to stop prices rising according to ASB economist Daniel Smith.

Mr Smith analysed data from realestate.co.nz, the country's biggest house sale website, and said listings in Auckland fell four 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.

According to Mr Smith, the restrictions have marginally dented demand but they may also have scared off potential sellers with the low supply keeping the market tight and the prices high, especially in Auckland.

The new loan to value (LVR) restrictions, where a 20 per cent deposit is required from most new residential mortgage lending customers, don’t appear to have done anything to stop prices rising according to ASB economist Daniel Smith.

Mr Smith analysed data from realestate.co.nz, the country’s biggest house sale website, and said listings in Auckland fell four 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.

According to Mr Smith, the restrictions have marginally dented demand but they may also have scared off potential sellers with the low supply keeping the market tight and the prices high, especially in Auckland.

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