Wednesday, 6th December, 2017

The RBNZ surprised us on Wednesday by announcing that the loan-to-value ratio (LVR) restrictions would be eased slightly from the 1st of January 2018. While we had been expecting the RBNZ to lay out the path for their gradual removal, given the recent easing in financial stability risks, the timing took us by surprise. With the housing market just shaking off the impacts of the election, we expected the RBNZ would wait for clarity around the timing of the new housing policies still to lessen the risk of a housing rebound. However, the RBNZ appears confident that the risk of a resurgence in house prices remains low.


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