[WELLINGTON] New Zealand house prices continued to rise in August and the average value for a house in the largest city of Auckland topped the million dollar mark for the first time, the government property valuer said on Tuesday.
Quotable Value's (QV) residential property price index rose 14.6 per cent in the year to August and house prices are now 47.8 per cent above a previous market peak of late 2007.
House prices in the Auckland region rose 15.9 per cent on the year and are now 85.5 per cent higher than the previous peak.
New Zealand house prices have soared on the back of strong immigration, low mortgage interest rates and constricted housing supply, with much of the push coming from property investors.
The central bank has consistently warned that the rise in house prices is a risk to financial stability.
On Monday it reiterated it was raising deposit requirements for residential property investors to take some of the heat out of the housing market.
The new rules will come into effect on Oct 1 but banks are already implementing them.
QV National spokesperson Andrea Rush said that while there was a strong surge of activity in June and July it appears that the new lending curbs are having an impact, in particular in Auckland, Tauranga and Hamilton.
Fast rising Auckland house prices led many investors to turn to Tauranga and Hamilton, two fairly large centres within a two-hour drive.
"In recent weeks there has been a drop-off in market valuation requests, auction clearance rates, open home attendees and loan application rates in these centres," said Ms Rush.