Prices up 11.4% in Nov as higher rates curb demand.

(WELLINGTON) New Zealand’s house prices rose at the slowest pace in six months in November, adding to signs that higher borrowing costs are curbing domestic demand.

Mr Bollard: The central bank chief, who raised the benchmark interest rate four times between March and July to a record 8.25 per cent, said last week that the effective mortgage interest rate faced by borrowers will rise further

House prices gained 11.4 per cent from a year earlier, according to a report released yesterday by Quotable Value New Zealand, the government valuation agency. That’s less than the 12.7 per cent annual pace in October and the slowest since May.

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Remarks seen as signal that bank won’t raise rates, now at record high.

(WELLINGTON) New Zealand’s housing market is slowing in response to record-high interest rates, Reserve Bank governor Alan Bollard said, adding to signs the central bank won’t raise borrowing costs again.

Mr Bollard: Demand may be abating for the New Zealand dollar from investors who borrow cheaply in yen to invest in the nation’s higher-yielding assets

‘We’re now seeing monetary policy having its impact on the housing sector in quite a significant way,’ Mr Bollard told a parliamentary committee in Wellington on Tuesday. ‘It’s having the sort of impact it needs to have.’

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(WELLINGTON) New Zealand house sales fell 23 per cent in October from a year earlier, adding to signs the property market is slowing after interest rates rose to a record.

House sales dropped to 6,854 homes, from 8,857 a year earlier, according to a report from the Real Estate Institute of New Zealand Inc. Sales rose from a six-year low of 5,894 in September.

Reserve Bank governor Alan Bollard last month kept the benchmark interest rate at a record-high 8.25 per cent after four increases between March and July as he seeks to curb domestic demand. Last week, he said bank lending levels have dropped and there had been a ’sharp downturn’ in home-loan approvals.

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Central bank likely to keep key rate at record 8.25%, highest in developed world.

(WELLINGTON) It has taken four consecutive interest rate increases to record high levels but New Zealand’s central bank looks to have finally taken the heat out of its biggest inflation worry - the housing market.

Cooling: Housing data, showing median house prices levelling off and sales coming down sharply, suggest a slowdown has already begun. Annual price gains eased to 12.3% last month from 12.9% in August

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