New evidence has arisen suggesting that the Reserve Bank of New Zealand (RBNZ) has played a direct role in inflating New Zealand’s housing market, which is experiencing its strongest price growth since 2004.
Over the weekend, Interest.co.nz revealed that the Treasury department recommended finance minister Grant Robertson advise the RBNZ to restrict the newly created $28 billion Funding for Lending Programme (FLP) to businesses in order to stimulate productive activity.
The RBNZ refused to introduce such conditions and instead began providing cheap loans to banks, in turn fueling mortgage demand and rapid house price growth:
