From Banking Day:
New Zealand’s banks have already begun clamping down hard on mortgages with high loan-to-valuation ratios, ahead of the expected introduction of a “speed limit” on their growth by the Reserve Bank of New Zealand.
RBNZ figures released this week show the value of mortgage approvals in the 13 weeks to July 12 was up just 3.2 per cent compared with the same period a year earlier. This is down sharply from the annualised growth seen in the 13 weeks before May 10 of 16.9 per cent.
“Banks have certainly toughened their decision making in recent weeks as they prepare for the Reserve Bank’s restrictions,” said Roost Mortgage Brokers’ spokeswoman Colleen Dennehy.
It’s worth thinking about, no? If macroprudential works, we could be deploying it ourselves, ramping LVR limits (or similar) while slashing interest rates and watching the dollar fall like a stone. That would give us hope of bridging the mining investment cliff.
Instead we wait and cut rates paced with the disintegration of the economy, virtually ensuring that confidence erodes along with it and that there’ll be nothing rising in mining’s place.
