Reserve Bank Governor Adrian Orr expects house price growth to fall to almost zero.
He told media at a press conference this afternoon that the expanded loan to value ratio (LVR) restrictions are already working.
"House prices will slow significantly and soon," Orr stated when asked about the housing crisis in New Zealand.
He outlined the reasons behind his assertion.
"We are seeing significant tax changes for housing investment.
"We are seeing significant supply in housing with increased construction, and we ourselves have put into effect loan to value lending restrictions and population growth has been slow."
Orr then went on to make a big prediction.
"We are projecting zero quarterly growth rates from the middle part of this year for a time."
He says this could be a positive thing as, "prices by staying still for a while can eventually bring the current price and what we call sustainable prices back together again."
It comes as the Official Cash Rate will remain unchanged at 0.25 per cent, in an announcement today.
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