Reserve Bank of New Zealand (RBNZ) analyst, Hayden Skilling, has published an analytical note examining recent housing market trends, which highlights the growing influence of investors in pushing-up Auckland house prices, as well as the impact of RBNZ’s 10% speed limit on high loan-to-value ratio (LVR) lending, which was implemented in October 2013.
The [LVR] policy had an immediate dampening effect on housing market activity and house price inflation, and facilitated a strengthening in bank balance sheets. However, since late 2014, upward pressure on the housing market has re-emerged, predominantly in Auckland, posing renewed risks to financial stability.