RBNZ: FSR to indicate further easing of the LVR restrictions? - Westpac

Analysts at RBNZ explain that the RBNZ’s six–monthly review of the financial system provides a window of opportunity to review the loan–to– value restrictions on mortgage lending, which is due to be released tomorrow.

Key Quotes

“Last November the RBNZ eased the LVR restrictions, albeit only slightly, and indicated the criteria for a further easing. House price and credit growth would need to slow to more sustainable rates, and the RBNZ would need to be satisfied that an easing wouldn’t lead to a resurgence in the housing market.”

“House price inflation is running at or below household income growth, and credit growth has slowed. A range of new Government policies aimed at cooling the housing market are in progress.”

“Our forecasts assume some further easing of the LVR restrictions over this year. It’s quite possible that the RBNZ will move as early as this month, even if it’s just an incremental move along the way.”