First month of house price falls?

House price data from Quotable Value NZ is out next week, and in it we could see softness emerge in house price growth, particularly in areas outside Auckland.  In July, the Reserve Bank announced that it will be tightening loan-to-value ratio limits, cracking down on investors in the New Zealand property market.  Retail banks began to phase in the changes immediately, having been asked to “follow the spirit” of the rule change by the Reserve Bank.  But the swift uptake of the new LVR rules has also benefited retail banks concerned about exposure to the overheated property market.  Along with the quicker than usual implementation of the loan-to-value ratio requirements, banks have also cut lending to foreigners purchasing property in New Zealand, and developers are finding it harder to obtain finance for residential developments.