Reserve Bank must analyse LVR equity

Press release: ACT New Zealand
June 9, 2016. 1:40pm

It is disappointing that yet another Monetary Policy Statement has been released without analysis on the equity of loan-to-value ratios.

"The Governor is now talking about debt-to-income ratios, without asking what loan-to-value ratios have done to young and first home buyers.

"Young people saving for a deposit took a kick in the guts when loan-to-value ratios kicked in, and now the Governor is blithely speculating that he will introduce debt-to-income ratios.

"It is worrying that the Minister of Finance is now taking an active role in the Bank’s policies. The independence of the Reserve Bank is a cornerstone of New Zealand’s otherwise world leading monetary policy.

"People should ask: Have the loan-to-value ratios worked? Have the loan-to-value ratios been fair to younger first home buyers?

"Why is the Reserve Bank Governor announcing debt-to-income ratios that will hurt younger first home buyers without working out if loan-to-value ratios were effective?"

ENDS

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