New Zealand Economy

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NZ house prices set new record as LVR caps bite

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its November house price results, which registered an increase in median values nationally, with price increases also recorded across the major markets. In the month of November, the national stratified median price rose by 1.2% to just over $437,000. Prices rose

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RBNZ juices new home construction

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) has today changed its limits on high loan-to-value ratio (LVR) mortgage lending to exempt new home construction, in a move that is clearly aimed at stimulating housing supply: New residential construction loans will now be exempt from the loan-to-value (LVR) restrictions introduced from 1

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RBNZ’s mortgage caps continue to show success

By Leith van Onselen The Reserve Bank of New Zealand’s (RBNZ) speed limits on high loan-to-value ratio (LVR) mortgage lending appear to be showing more signs of success, with the latest housing loan approvals data from the RBNZ suggesting that mortgage demand is falling, as evident by year-on-year growth in the number of approvals (-8.6%)

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RBNZ’s mortgage caps are working

By Leith van Onselen I noted last week how the Reserve Bank of New Zealand’s (RBNZ) speed limits on high loan-to-value ratio (LVR) mortgage lending were showing early signs of success, with the latest housing loan approvals data from the RBNZ suggesting that mortgage demand was falling as evident by year-on-year growth in the number

11

RBNZ aims for housing slow melt on China risk

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) yesterday released its biannual Financial Stability Report (FSR), which warns on housing risks and assesses the initial impact of its speed limits on high loan-to-value ratio (LVR) mortgage lending, which were implemented on 1 October 2013. According to the RBNZ: “The main threat to

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NZ house prices hit new record as LVR caps bite

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its October house price results, which registered an increase in median values nationally, with price increases also recorded across the major markets. In the month of October, the national stratified median price rose by 1.6% to just over $423,000. Prices rose

24

NZ Government shows the way on housing policy

I have said it before and I will say it again: New Zealand is leaving Australia for dead when it comes to housing policy. Unlike the Reserve Bank of Australia (RBA) and the Australian Prudential Regulatory Authority (APRA), which continue to hose down concerns about risks building in the Australian housing market, New Zealand’s central

12

SMH undermines RBNZ experiment

The SMH is doing its bit today to undermine New Zealand’s admirable macroprudential experiment with some propaganda from Rate City: After New Zealand recently introduced tougher restrictions on higher-risk lending by its banks, new figures suggest Australian banks are also offering more home loans that require a relatively small deposit. RateCity today says the proportion of

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CBA slams mortgage brakes as MP bites in NZ

From Banking Day: Commonwealth Bank’s New Zealand subsidiary ASB has announced that customers with pre-approvals for high loan-to-valuation ratio mortgages must “use them or lose them” within 10 days, in its most drastic measure yet to slow lending to meet the Reserve Bank of New Zealand’s new “speed limit”. ASB apologised to customers for withdrawing

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Auckland drives up New Zealand house prices

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its August house price results, which registered a big rise in median values nationally driven by escalating prices in New Zealand’s biggest market, Auckland, where the stratified median price hit a whopping $645,653. In the month of August, the national stratified

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NZ moves to unblock land supply

By Leith van Onselen Yesterday, New Zealand’s parliament passed new laws to free-up land supply and remove planning bottlenecks in a move aimed squarely at improving housing affordability: The Housing Accords and Special Housing Areas Bill passed its third reading in Parliament today 63 votes to 56 and will come into effect Monday 16 September. “This

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Debate rages over RBNZ’s LVR cap

By Leith van Onselen Debate over the likely impact and merits of the Reserve Bank of New Zealand’s (RBNZ) speed limits on high loan-to-value (LVR) mortgage lending continues, with Fitch Ratings Agency arguing that the reforms will have limited impact on overall mortgage demand and house prices, but should help improve financial stability by lessening

2

The pros and cons of macroprudential

By Leith van Onselen Following on from Houses & Holes’ earlier post summarising Reserve Bank of New Zealand (RBNZ) modelling showing a potential 4% hit to house prices arising from its speed limit on high loan-to-value ratio (LVR) lending, above is an interesting short video of Interest.co.nz’s Gareth Vaughan explaining the changes and some of

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RBNZ launches limits on high risk mortgages

By Leith van Onselen Just in, the Reserve Bank of New Zealand (RBNZ) has officially launched speed limits on high loan-to-value ratio (LVR) mortgage lending, effective from 1 October 2013. From the RBNZ website: Reserve Bank Governor Graeme Wheeler today announced that from 1 October banks will be subject to restrictions on high loan-to-value ratio

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RBNZ refines LVR cap. But will it work?

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) has released further details on its plan to put “speed limits” on high loan-to-value (LVR) lending, which has recently accounted for around 30% of new lending over the past year. Under the proposed changes, mortgages with an LVR of more than 90% would still

7

NZ spills milk in China shock

From  Bloxo: This weekend New Zealand’s trade minister announced that some of its exported dairy products have potentially been contaminated with bacteria that cause botulism. The trade minister noted that they understand that exports to Australia, China, Malaysia, Saudi Arabia, Thailand and Vietnam have been affected. As dairy products account for around 25% of New

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NZ: Rising house prices to force rate hikes

By Leith van Onselen Two bank economic reports have been released today anticipating ongoing strong house price growth in New Zealand irrespective of whether the Reserve Bank of New Zealand (RBNZ) implements loan-to-value ratio speed limits, which will force the RBNZ to raise interest rates from 50-year lows. First up is HSBC’s Paul Bloxham: New

5

NZ Labour would restrict foreign property purchases

By Leith van Onselen New Zealand’s opposition Labour Party has announced that, if elected, it would emulate Australia and restrict foreign purchases of real estate to new dwellings, as well as implement a capital gains tax on second homes: Labour’s proposal to ban all foreign non-residents except Australians from buying existing houses is aimed at

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Is the NZ housing market faltering?

By Leith van Onselen UBS has today released a short note arguing that the recent slowdown in growth of New Zealand housing finance commitments is unlikely to stem growth in house prices or prevent the Reserve Bank of New Zealand’s (RBNZ) from implementing loan-to-value ratio (LVR) speed limits on new lending: As we wait for

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Does the RBNZ risk losing its independence?

By Leith van Onselen Yesterday I noted how the Reserve Bank of New Zealand (RBNZ) was soon likely to implement speed limit controls on high loan-to-value (LVR) mortgage lending that would limit growth of 80%-plus LVR mortgages to 12%, significantly below the 30% growth experienced over the past year. I also noted how such meaures

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RBNZ to impose tight controls on high LVR lending

By Leith van Onselen From Interest.co.nz’s Bernard Hickey today comes news that New Zealand’s central bank and prudential regulator, the Reserve Bank of New Zealand (RBNZ), is about to implement speed limit controls on high loan-to-value (LVR) mortgage lending: Two banking sources have told me the Reserve Bank advised them informally on Friday that it