NZ house price growth picks up for first time since Dec 2013

Wellington

GROWTH in New Zealand's house prices picked up for the first time in a year in January, driven by a lift in the biggest city where a lack of houses underpinned values, the government property valuer said on Tuesday.

Quotable Value's (QV) residential property index rose 5.7 per cent in the year to Jan 31, compared with an annual rate of 4.9 per cent in December.

It was the index's first rise since December 2013, and it was 19.2 per cent above the market's previous peak in late 2007.

"Following a big month of sales in December, there remains a shortage of properties listed for sale and this is continuing to put pressure on values and also on buyers," said QV spokeswoman Andrea Rush in a statement.

House prices in the Auckland region were 11.6 per cent higher in the year to January compared with a 9.8 per cent rise the month before, while prices in earthquake-damaged Christchurch rose 3.4 per cent from an annual rate of 3.2 per cent in December.

The government agency said restrictions on low deposit lending remained an obstacle to first home buyers, but the value of new housing developments, which are unaffected by the lending limits, were rising on higher demand.

The Reserve Bank of New Zealand said last week that it expected to keep rates on hold for some time and that its next move could be either up or down, while also warning there were signs that the housing market, especially in Auckland, was heating up again. REUTERS