(Recasts, adds more comment from central bank, and housing market data)
WELLINGTON, May 11 (Reuters) - New Zealand's central bank is "increasingly concerned" about the nation’s overheated housing market, Governor Graeme Wheeler said, possibly slowing the pace of further monetary easing as fresh data showed home prices reached record highs last month.
The housing market has long been a source of concern for the central bank, in particular in the nation's largest city, Auckland.
"We are concerned about the rate of house price inflation in Auckland," Wheeler said at a media conference on Wednesday after presenting the central bank's twice-yearly Financial Stability Report.
Analysts said the rapid rise in housing values could make the RBNZ cautious about further easings after it slashed rates to a record low 2.25 percent earlier this year.
"Tension will remain for the time being between the monetary policy and financial stability objectives. In the short term this may continue to temper the RBNZ’s willingness to cut the OCR much further," said ASB Chief Economist Nick Tuffley.
The central bank kept its benchmark interest rate unchanged in late April but reiterated further easing may be needed given weak inflation.
Some analysts expect another rate cut in June, although worries around house price inflation may delay any more easings.
"Today’s data was a reminder that a lower OCR is not without its risks, and highlights the need for more non-OCR measures to tackle housing demand," said ANZ Bank Senior Economist Mark Smith.
Wheeler said because of the risks from house inflation the bank will "seriously" look at further macro-prudential tools to curb lending. These could include speed limits around debt-to-income levels.
The RBNZ has previously tightened lending rules to curb soaring house prices and it said on Wednesday that those measures have reduced the share of risky lending on bank balance sheets.
The central bank said there was no time frame to present any new measures.
"We need to do more analysis and have discussions with the finance minister," said Wheeler.
Data from the Real Estate Institute of New Zealand (REINZ) Wednesday showed New Zealand house prices rose 1.4 percent in April, while sales volumes rose a seasonally adjusted 12.8 percent.
REINZ chief executive Colleen Milne said in a statement that a "chronic lack of supply" was driving prices across New Zealand.
On Wednesday, Wheeler said policymakers' concerns over home prices went well beyond Auckland.
"It's not just Auckland. We are seeing house price pressures building up elsewhere in the country," he said.
