Reserve Bank to ease LVR restrictions
The opportunity for first home buyers to get onto the property ladder will likely get easier in 2018, following the Reserve Bank of New Zealand’s announcement that it will undertake a ‘moderate easing’ of the LVR restrictions.
Reserve Bank Governor said, when releasing the bank’s Financial Stability Report, “Over the past six months, pressures in the housing market have continued to moderate due to the tightening of LVR restrictions in October 2016, a more general firming of bank lending standards and an increase in mortgage interest rates in early 2017.”
“Housing market policies announced by the Government are also expected to have a dampening effect on the housing market.”
“In light of these developments, the Reserve Bank is undertaking a modest easing of the LVR restrictions. From 1 January 2018, the LVR restrictions will require that:
- No more than 15 percent (currently 10 percent) of each bank’s new mortgage lending to owner occupiers can be at LVRs of more than 80 percent.
- No more than 5 percent of each bank’s new mortgage lending to residential property investors can be at LVRs of more than 65 percent (currently 60 percent).
Read the full statement here: https://www.rbnz.govt.nz/news/2017/11/reserve-bank-to-ease-lvr-restrictions