A gut feeling that banks may not have learned their lesson around prudent lending is holding Reserve Bank governor Adrian Orr back from easing loan to value restrictions, Lynn Grieveson reports.
The Reserve Bank gave the financial system a clean bill of health in its half-yearly Financial Stability Report today, but said it wanted to see subdued mortgage lending growth sustained before it further eased restrictions on Loan to Value Ratios.
In today's email we looked in detail at the Reserve Bank's comments as it loosened LVR restrictions, and at the implications of the new directive to the Overseas Investment Office.
Reserve Bank Governor Grant Spencer was at pains yesterday to portray his slight relaxation of Loan to Value Ratio restrictions as no 'green light' for home buyers and bankers to jump back into a market about to boom again.
The Reserve Bank has announced it will slightly relax its Loan to Value Restrictions (LVRs) on owner occupiers and rental property investors from January 1 because of a moderation in house price inflation.
In toda's email we previewed the Reserve Bank's likely relaxation of Loan to Value Restrictions (LVRs), and why any decision won't be a real game changer for first home buyers.
In today's email we look at the funding squeeze on the big banks, Wheeler's warning on houses, and the progress of the DTI limits (and we check out the covfefe coverage of Trump's midnight tweet).
The Reserve Bank has revealed a funding squeeze on New Zealand's big four banks has frustrated attempts to ramp up housing supply in Auckland this year, and the squeeze is set to get worse before it gets better.
The Reserve Bank has reported the risks in the financial system have reduced in the last six months, but warns that house prices remain overvalued in many parts of the country and the most indebted borrowers remain vulnerable to a correction and a sharp rise in interest rates.
The focus in and around yesterday's half-yearly Financial Stability Report was on the Reserve Bank's plans for Debt To Income (DTI) limits and the impact of the Kaikoura quake.