MUFG 1/7: #NZD: #RBNZ responds to building housing market risks.
Policy developments in New Zealand have attracted market attention overnight after the #RBNZ tightened macro-prudential policy in an attempt to dampen building risks in the domestic housing market.
Policy developments in New Zealand have attracted market attention overnight after the #RBNZ tightened macro-prudential policy in an attempt to dampen building risks in the domestic housing market.
MUFG 2/7: The #RBNZ has stated that it will reinstate mortgage lending restrictions on 1st March & tighten them further for investors from 1st May.
The re-introduced lending restrictions mean that most owner-occupiers will need a 20% deposit to get a mortgage, while investor
The re-introduced lending restrictions mean that most owner-occupiers will need a 20% deposit to get a mortgage, while investor
MUFG 3/7: will need 30%. From 1st May, the
required down-payment for investors will rise to 40%.
RBNZ Deputy Governor Geoff Bascand warned that “a growing number of highly indebted borrowers, especially investors, are now financially vulnerable to house price corrections and
required down-payment for investors will rise to 40%.
RBNZ Deputy Governor Geoff Bascand warned that “a growing number of highly indebted borrowers, especially investors, are now financially vulnerable to house price corrections and
MUFG 4/7: disruptions to their ability to service debt”. They are concerned about the risk of a sharp correction in the housing market poses for financial stability especially as there is “evidence of a speculative dynamic emerging with many buyers becoming highly leveraged”.
MUFG 5/7: Fin Min Robertson has also added that the government will soon unveil measures to help curb housing demand. The building risks to financial stability from the housing market have been one of the negative side effects of running loose monetary policy to support growth.
MUFG 6/7: According to one measure, house prices have increased by 12.8% over the past year. As a first step the RBNZ & government are focusing on macro-prudential measures to dampen risks posed by the housing market. However, the developments will also encourage some speculation
MUFG 7/7: that the #RBNZ may eventually need to tighten monetary policy sooner as well. The kiwi is already benefitting from the scaling back of expectations for further #RBNZ rate cuts as the economic recovery in New Zealand has proven stronger than expected.
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