Key urges Reserve Bank 'get on with it'

  • 05/07/2016

If the Reserve Bank intends tightening property investment restrictions it should do it sooner rather than later, Prime Minister John Key says.

Property prices are reaching new highs and Quotable Value thinks investors are snapping up properties because they're anticipating changes.

"We have had those discussions with the Reserve Bank ... my own view is it should make some moves in that area," Mr Key told reporters on Tuesday.

"If they're going to make changes, probably they should get on with it."

Reserve Bank deputy governor Grant Spencer is due to make a speech on Thursday and there's speculation he will use it to outline new measures.

In November last year the bank restricted investor borrowing in Auckland to 70 percent of the value of the property they were buying.

In the rest of the country the limit is 80 percent.

The bank could strengthen the investor restriction in Auckland, or in the whole of the country.

Mr Key says the bank hasn't given him any signals.

Asked whether he expected Mr Spencer to announce tighter loan-to-value rules on Thursday, he replied: "Not on Thursday, but over time, potentially."

Figures released on Tuesday show the average value of a New Zealand home increased 13.5 percent to $590,909 in June from a year earlier, the fastest pace since 2004.

Quotable Value's data shows Hamilton led the latest gains, with values soaring 29 percent to $492,403 while Tauranga was up 24 percent to $599,915.

In Auckland, values increased 16 percent to an average $975,087.

QV said the prospect of further restrictions on investor activity seems to have prompted a surge, with buyers acquiring as many properties as possible under the current rules.

"It appears this may have led to a surge in investor purchases in various housing markets around the country over the past month," it said.