House prices could be hard hit by mortgage rules
The Reserve Bank's speed limits on home loans could see $5300 wiped off the value of Palmerston North homes.
But that is nothing compared to Rangitikei, where values could plummet by nearly $14,000.
From the beginning of the month, new loan-to-value (LVR) ratios restricted how much banks could lend to low-equity borrowers with deposits of less than 20 per cent.
The move was made to dampen soaring house prices in larger centres, especially Auckland.
A recent report from the central bank, released this week, said house price growth would drop by 1-4 percentage points as a result of the limits.
Any drops would likely be felt hardest in the first year of limits, it said.
Labour Party housing spokesman Phil Twyford provided figures to the Manawatu Standard, which used the Reserve Bank's 1-4 percentage point figure and compared it to recent Quotable Value data.
QV measures housing values, but does track in the same direction as house price data from the Real Estate Institute.
If growth dropped by 4 percentage points in Rangitikei, housing values in the area would fall by $ 13,800 by the time September 2014 rolled around.
Palmerston North values would fall $5300, Tararua values would dip $4000 and Horowhenua values would drop $1800.
In the meantime, values in some areas of Auckland would increase by up to $98,000.
Mr Twyford said the "one size fits all" approach to fixing the property bubble was not working, as the areas with quickly-rising prices would continue to see growth while areas with little or no growth would go backwards.
"Rangitikei already has house price deflation of 5.1 per cent.
"As well as reducing home owners' equity, this risks a depressing effect on the local economy.
"Homeowners in the Manawatu risk ending up as the collateral damage of a policy designed to dampen demand in the Auckland housing market." Those who owned properties in areas like Rangitikei would be "understandably grumpy" at that scenario, Mr Twyford said.
A spokesman for Housing Minister Nick Smith said there was "no silver bullet" solution to the problem, but the Government was taking action on a range of fronts.
The number of people in Manawatu eligible for a first home subsidy through KiwiSaver would go from 380 this year to 690 in future years.
The Auckland Housing Accord would see 39,000 new home consents fast-tracked during the next three years in Auckland, helping pull down prices there.