Auckland house prices keep central bank awake at night, says official

Wellington

SURGING Auckland house prices pose an increased risk to New Zealand's financial stability but the central bank can't raise interest rates to curb demand, deputy governor Grant Spencer said.

"When something keeps you awake at night, it is good to do something about it," Mr Spencer said in a speech published on the Reserve Bank's website on Monday. The response must be multi-faceted because "the current weakness in export prices, economic activity and CPI inflation means that interest-rate increases are likely to be off the table for some time", he said.