New Zealand's central bank is considering imposing tougherlending limits on property investors as housing prices increase nationwide,Bloomberg News reported July 7.
The ReserveBank of New Zealand may adopt a single national loan-to-value ratiofor investors given the growing housing market pressures across the country,said RBNZ Deputy Governor Grant Spencer. The measure could be introduced by theend of 2016, he added.
The RBNZ had introduced loan-to-value ratios on all homelending in 2013 and tightened restrictions in Auckland two years later as houseprices surged in the city. Investors in Auckland are required to have a 30%deposit for a mortgage, a rule that could be extended to the entire country.
New Zealand house prices have increased 13.5% in June fromthe prior-year period, driven by low borrowing costs and soaring immigration.Prices in the Auckland have also increased, rising 4.7% in the three monthsended June 30, despite the lending rules already in place.
The central bank is also studying the possibility ofimplementing debt-to-income ratios. Spencer said the central bank would consultwith banks on the viability of such a policy and data issues before making adecision.