Labour Must Rule Out Debt-to-income Limits
Despite the Government finally accepting National’s argument that the way to solve the housing crisis is to allow more houses to be built, it doesn’t appear the Finance Minister has got the memo, says National’s Shadow treasurer Andrew Bayly.
“News today that the Reserve Bank is still considering the introduction of debt-to-income (DTI) lending restrictions is extremely concerning, and shows that Grant Robertson can’t quite kick his addiction to counter-productive meddling in the housing market.
“DTI limits would impose artificial restrictions on the amount banks can lend to home buyers based on their income.
“To anyone with even the most rudimentary understanding of how banking works, the outcome of such a rule should be obvious – the first people banks will cut lending to are those on low incomes, making it even harder than it already is for first home buyers to get onto the property ladder.
“The Government is supposed to be making things easier for first home buyers, not harder.
“The Reserve Bank has been tying itself in knots trying to pretend these tools are necessary for financial stability. Appearing before the Finance and Expenditure Select Committee today, Reserve Bank officials did such a poor job of defending DTIs, they gave the impression they were begging for them to be ruled out.
“The reality is Grant Robertson has been leaning on the bank to help hide the Government’s failure on housing. Making it harder for first-home buyers to borrow in a desperate attempt to get skyrocketing house prices out of the headlines is both cynical and wrong.
“Grant Robertson needs to step in immediately and rule these changes out.”