'Crazy' Auckland house prices leave central bank chief in a bind

Wellington

AUCKLAND mortgage broker John Bolton says that business went through the roof when central bank governor Graeme Wheeler started talking about cutting interest rates.

Mr Bolton's Squirrel Mortgages has more than doubled loan volumes since March, when Mr Wheeler removed a bias toward higher rates and outlined conditions that might warrant a cut. The boom highlights Mr Wheeler's dilemma: responding to near-zero inflation risks stoking a housing bubble in New Zealand's largest city.

"That change in how we describe future int…