Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Housing boom could get worse, economist warns

Economists are calling on the Reserve Bank of New Zealand to reinstate lending restrictions, warning the housing market is spiralling out of control.

In May, the Reserve Bank temporarily removed loan to value ratio (LVR) restrictions, freeing banks to sell mortgages to buyers with small deposits.

Since June, lending to investors has tripled and last month banks lent out more than $7.3 billion to house buyers - which is an all-time record.

ASB Bank senior economist Mike Jones says the housing market might be too far gone if the LVR pause continues till next May.

He told Morning Report currently it was one-way traffic with low-interest rates and tight housing supply.

"The dropping of LVR restrictions in May has enabled a little more highly leveraged lending to occur than might otherwise."

Jones said back then, it was not anticipated that the country would be in "a deep recession but strangely enough, we've also had a housing boom".

"There is some merit in rolling back to [LVR] restrictions."

He could not say if the changes should come into effect immediately.

"If it [Reserve Bank] did wait until May next year it would risk letting the cat out of the bag ... and the housing boom would get a little bit further away from us."

But, he said, the Reserve Bank should ensure the returning of LVR did not interfere with the mortgage holiday scheme.

Yesterday, Infometrics senior economist Brad Olsen said the state of the property market was exacerbating inequality where prices were on the rise as people continued to lose jobs.

© Scoop Media

 
 
 
Top Scoops Headlines

 


Binoy Kampmark: A Looting Matter: Cambodia’s Stolen Antiquities

Cambodia has often featured in the Western imagination as a place of plunder and pilfering. Temples and artefacts of exquisite beauty have exercised the interest of adventurers and buccaneers who looted with almost kleptocratic tendency. In 1924, the French novelist and future statesman André Malraux, proved himself one of Europe’s greatest adventurers in making off with a ton of sacred stones from Angkor Wat... More>>



Dunne Speaks: Labour Leadership Speculation Premature And Facile
Speculation that the Prime Minister’s leadership of the Labour Party may be at risk because of this week’s adverse poll results is as exaggerated as it is premature and facile. While her popularity has plummeted from the artificially stellar heights of a couple of years ago and is probably set to fall further to what would be a more realistic assessment... More>>




Ian Powell: Colossal ‘Porkies’ And Band-aids Don’t Make A Health Workforce Plan

On 1 August Minister of Health Andrew Little announced what he described as the start of a plan for the beleaguered workforce in Aotearoa New Zealand’s health system: Government’s 5 year late health workforce announcement. In October 2017, when Labour became government with its two coalition parties, it inherited a health workforce crisis from the previous National-led government... More>>


Binoy Kampmark: The Fuss About Monkeypox
The World Health Organization has been one of the easier bodies to abuse. For parochial types, populist moaners and critics of international institutions, the WHO bore the brunt of criticisms from Donald Trump to Jair Bolsonaro. Being a key institution in identifying public health risks, it took time assessing the threat posed by SARS-CoV-2 and its disease, COVID-19... More>>

Dunne Speaks: Time For MPs To Think For Themselves
One of the more frequently quoted statements of the Irish statesman and philosopher, Edmund Burke, was his observation that “Your representative owes you, not his industry only, but his judgement, and he betrays instead of serving you if he sacrifices it to your opinion.”... More>>