RBNZ sees macroprudential working

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RBNZ Governor Graeme Wheeler argues this morning that evidence is building that the bank’s new LVR limits are working. And what a breath of fresh air is the framing of the issue versus the RBA’s “power of positive thinking ” approach. No ‘it’s different here’ claptrap in NZ.

David Llewellyn-Smith
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Comments

  1. If you listen to Graeme Wheeler’s words you might see that he isn’t trying to correct the imbalances in our property market, but stop that from happening! What he is right about though is the ripple effect. A pretty standard ’60’s, well established property was put up for auction in a major non-Auckland/Christchurch city last week, and was being marketed as “about $1.25m”. I and others (who are property investors!) thought that seemed optimistic. It went, before auction for …$1.95m, because it was cheaper to buy here than in Auckland….

    • Oh God.

      Who would have thought that Emperor Bernanke will not allow his Dark side apprentice to betray him and turn (without deep frying him with his Dark side lightning)?

    • Yes we need more IR cuts here. We can’t yet match that level of prosperity. This nation is as good as New Zealand. We need lower interest rates now to fulfil our destiny as the wealth leader of the antipodes. We can’t lose the Rugby AND the damned RE race to these damned Kiwis.

  2. I have enormous regard for the integrity and competence of New Zealand Reserve Bank Governor Graeme Wheeler.

    In normal markets housing does not exceed 3.0 times annual household income … importantly … requiring mortgage loads of about 2.5 times.

    Refer … 2013 Demographia Housing Survey … and earlier SMH article …

    http://www.demographia.com/dhi.pdf

    http://news.domain.com.au/domain/home-investor-centre/report-housing-affordability-out-of-sync-with-incomes-20110202-1ad3m.html

    Hugh Pavletich
    http://www.PerformanceUrbanPlanning.org