NZ: RBNZ’s Financial Stability Report in focus – Westpac

Westpac analysts suggest that the RBNZ’s six–monthly review of the financial system often serves as a window for reviewing the loan–to–value restrictions on mortgage lending.

Key Quotes

“The LVR restrictions have been loosened twice so far, in November 2017 and 2018.”

“We do not expect a further change at this review. House prices are up by just 3.9% in the last year, but there has been a marked acceleration in recent months as mortgage rates have fallen sharply and the threat of a capital gains tax has been removed. The RBNZ will be wary of adding more stimulus at this point.”

“The RBNZ is unlikely to make any substantial comment on its proposal to increase bank capital requirements, ahead of the announcement scheduled for 5 December.”