The pace of rising house prices unexpectedly quickened last month, just as the head of the Reserve Bank says they should start falling.
The average national house price is $970,174, according to the latest figures from CoreLogic. (File image) Photo: RNZ / Cole Eastham-Farrelly
CoreLogic's House Price Index showed the average national house price rose by 2.1 percent in October on the month before, after slowing in the previous five months.
CoreLogic head of research Nick Goodall put the spike down to Covid-19 lockdowns affecting listings.
"Already low levels of supply dropped further during this time and while inventory levels have since started to recover, advertised supply is likely lower now than otherwise may have been, which would have placed renewed upwards pressure on prices."
The average national price was $970,174, for an annual rise of 28.8 percent, and record highs in many centres including Auckland, Tauranga, Wellington, and Christchurch.
Goodall said perversely a tightening market, and greater headwinds for buyers could be a spur for activity.
"Confidence in the property market remains high and while tighter credit conditions, worsening affordability and increasing interest rates will weigh on market activity, the promise of tougher conditions in the future can actually lead to increased competition in the short term as buyers aim to beat any further policy intervention."
The latest market numbers came as the Reserve Bank Governor Adrian Orr told a property conference prices have risen to an unsustainable level, although the RBNZ's significant rate cut and easy money policies probably played only a "fringe" role in the rapid increase over the past year.
He told the conference the central bank is working on debt to income ratios, a measure of borrowers' ability to service their loans, as a further tool to curb risky lending.