Rising New Zealand property values accelerated last month as the lack of listings in Canterbury and Auckland continue to overheat the market, prompting the Reserve Bank to impose low-equity home lending restrictions from next month.
Property values rose at an annual pace of 8.5 per cent in August, from an 8.1 per cent annual pace a month earlier, according to state-owned Quotable Value. House values rose 2.9 per cent in the three months ended August 31, slowing from the 3.1 per cent rolling three-monthly pace ending in July.
"Auckland and Canterbury are still driving the national increase in values, with the other main cities seeing limited growth,'' QV research director Jonno Ingerson said in a statement.
Auckland property values rose 3.3 per cent on a rolling three-month basis and were up 13 per cent on an annual basis, while Christchurch values were up 2.7 per cent on a three-month basis, and 11 per cent on the year.
The rapid lift in house prices in the country's two biggest cities raised fears of an asset bubble emerging, and prompted the Reserve Bank to impose restrictions on high loan-to-value ratio lending from next month.
QV's Ingerson is sceptical the plan will succeed in taking the heat out of the market, saying the lack of supply was the main cause of the increase.
"While the LVR limits may have some dampening effect on values, we should still expect them to increase for some time yet,'' Ingerson said.
Wellington property values rose 0.4 per cent in the three-month period, and were up 2.9 per cent on an annual basis. Dunedin values increased 0.3 per cent over the three-month period, and were up 3.4 per cent annually.