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

 

Reserve Bank right to change Loan to Value Ratio rules

RBNZ right to change LVR rules

10 December 2013

Today the Reserve Bank of New Zealand (RBNZ) announced changes to the Loan to Value Ratio (LVR) speed limits, removing the restriction against new residential builds. This is a sensible concession, reducing some of the political pressure on the LVR policy, and supporting expansion of the housing stock. We need more than a simple reliance on interest rates, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “This is a sound response to the claim that the LVR policy was slowing new builds. There could also be a case for regional exemptions as the real asset price pressure is in Auckland and Christchurch.”

“It is important we look beyond the immediate influence of the LVR policy on the housing market, and look to the consequences of increasing interest rates across the economy, particularly for added value exporters and import competing manufacturers. With only interest rates in the RBNZ’s tool box we might well have seen higher interest rates by now when others, such as Australia, are still looking at further loosening of their monetary policy. This contrast is a real worry for exporters.”

“This concession is the right one, but should not detract from the need for LVR policy and perhaps other prudential restrictions at some point.”

ENDS



© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

up arrow"Steady": GDP Up 0.6 Percent In March Quarter

“Construction was the main contributor to GDP growth this quarter, rising 3.7 percent, on top of a 2.2 percent increase in the previous quarter,” national accounts senior manager Gary Dunnet said. More>>

ALSO:

Gordon Campbell: On Our Wild West Banking Culture

David Hisco’s nine year stint as CEO of the ANZ bank (while his expense claim eccentricities went by unbothered by board oversight) has been a weird echo of the nine years of social neglect by the previous National government... More>>

ALSO:

Privacy & Regulation Issues: Hopes Facebook Currency Will Speed Pacific Transfers

A Tongan community leader is hopeful Facebook's planned digital currency will help end long wait times for money being transferred between New Zealand and the Pacific Islands. More>>

Oil Exploration: Chevron, Equinor Depart NZ

Chevron and Norwegian oil giant Equinor have opted to abandon their joint exploration efforts off the east coast of the North Island... Chevron said the decision not to proceed with the next five-year stage of their work programmes was based on the firms’ broader portfolio considerations and not “policy or regulatory concerns.” More>>

ALSO: