Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Home loan restrictions are biting, Reserve Bank says

Home loan restrictions are biting, Reserve Bank says

By Tina Morrison

Nov 28 (BusinessDesk) – Banks reduced the number of high debt mortgages they signed up in October, the first month of new Reserve Bank of New Zealand lending restrictions.

High loan-to-value ratio mortgage lending fell to 11.7 percent of total new mortgage lending in October, from 25.5 percent in September and around 30 percent earlier in the year, the Reserve Bank said, citing a new monthly survey which tracks the figures.

Under new rules introduced Oct. 1, banks must reduce lending at LVRs above 80 percent to no more than 10 percent of their total new mortgage lending over the next six months.

The central bank introduced the lending restrictions in an attempt to cool rising house prices, buoyed by demand from earthquake damaged Christchurch and an under-supplied Auckland market, on concern about financial stability. It is too early to assess what impact the lending restrictions are having on housing market activity, the bank said today.

“The reduction in high-LVR lending will help to reduce the risks of a sharp correction in house prices in an already overvalued housing market,” RBNZ deputy governor Grant Spencer said in a statement. “The banks are having to manage a pipeline of loans that were pre-approved prior to the LVR restrictions taking effect. The share of high-LVR lending is expected to fall further over the coming months as these pre-approvals run down.”

The bank has said that should the lending restrictions prove successful in curbing the bubbling housing market, it will lessen the extent of interest rate hikes it plans for next year.

The figures exclude Housing New Zealand’s Welcome Home Loans, the refinancing of existing high-LVR loans, bridging finance or the transfer of existing high-LVR loans between properties.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news