Acute housing market pressures to see loan-to-income restrictions introduced

House price growth in Auckland reaccelerated in June, with prices sitting 16% higher than a year ago, compared with 15%pa growth seen in May.  Furthermore, it is not just Auckland and its surrounds seeing their housing markets heat up. House prices in Queenstown during June were up 25% on a year ago, while prices in Wellington and Dunedin pushed up 14% and 11% respectively. This reacceleration of house prices, coupled with persistent delays in rectifying an undersupply of housing, is beginning to raise questions as to what the Reserve Bank’s next policy move will be.