Bollard says residential house prices may fall

"In housing, as with any other investment, it's the investor who takes the risk, thus it's the investor who needs to be careful," Bollard said in speech notes.

However, Bollard was careful to state that the Reserve Bank was not forecasting "a calamitous fall" in house prices over the next few years.

"A reasonable view is that house prices are unlikely to rise much further over the next two years, and some falls are certainly possible, particularly in some regions," he said.

He said some of the key drivers of the nationwide property boom were easing, such as rapid population growth.

Bollard's speech was for a New Zealand Property Council conference in Rotorua today, and ahead of his monetary policy statement on September 9.

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