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Property Institute says LVR loosening not fast enough

29 November 2017

Property Institute says LVR loosening not fast enough

Property Institute of New Zealand Chief Executive Ashley Church has welcomed news that the Reserve Bank has decided to loosen its Loan-to-value lending rules but says the speed at which the loosening is proposed isn’t nearly fast enough to address the problems that the rules have created.

“While it’s good to see that common sense has finally prevailed – the speed at which the Reserve Bank is proposing to relax the rules means the move will have very little effect.

Mr Church says that the LVR restrictions have locked a generation of first home buyers out of the property market and now appear to be the leading cause of a dramatic drop in the number of homes available for rental.

“These rules didn’t just impact on first home buyers – they also locked investors out of the market – and the chickens let loose through that particular action are now coming home to roost”.

Yesterday, the Property Institute of New Zealand released figures warning of a ‘perfect storm’ in rental market conditions and suggested that this will cause big increases in rents in many parts of the country, - primarily as a result of a shortage in the supply of rental housing caused by the imposition of the LVRs on property investors.

“This was all avoidable. The Property Institute has repeatedly called for the removal of the LVRs and has been drawing attention to the issues created by them for almost two years – back when other organisations were basking in the glow of the property boom, oblivious to the market disaster that was looming”.

Ends


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