Reserve Bank of New Zealand statement released.
- will proceed with its proposal to tighten Loan-to-Value Ratio (LVR) restrictions on lending to owner-occupiers to reduce risky mortgage lending.
- From 1 November 2021, we will be restricting the amount of lending banks can do above an LVR of 80 percent to 10 percent of all new loans to owner-occupiers, down from 20 percent at present
More is here including comments from Deputy Governor and General Manager for Financial Stability Geoff Bascand.
Initially the tightening was to occur from October 1 but
- given the disruptions from heightened COVID-19 alert levels to customers and banks in managing or completing purchases associated with existing pre-approvals, we are delaying our implementation start date to 1 November
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The Bank has been led kicking and screaming down the path of tightening housing lending due to direct instruction from the NZ government.
The RBNZ is still set to hike rates at its next meeting. Strong employment and rapidly rising inflation pressures the trigger.
AUD has fallen against the NZD given the difference in outlooks of the RBA and RBNZ on rates:
