New Zealand Economy

6

Yes, the RBNZ’s mortgage caps are working

By Leith van Onselen Fairfax’s Max Mason has written a piece today in The SMH arguing that the Reserve Bank of New Zealand’s (RBNZ) speed limits on high loan-to-value ratio (LVR) mortgage lending, implemented on 1 October 2013, are failing to cool New Zealand house prices: Tighter lending restrictions imposed by New Zealand’s central bank

7

LVR caps put the clamp on NZ house prices

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its December house price results, which registered a significant fall in quality-adjusted values nationally, with prices also down across two of the three biggest markets. In the month of December, the national stratified median price fell by 1.0% to just over

9

Kiwi growth leaves Oz in the dust, eh

From Interest.co.nz: Gross Domestic Product  rose 1.4% in the September quarter on the back of the largest expansion in the agricultural sector in 25 years, according to Statistics New Zealand. The extremely strong result, on the back of a rebounding dairy market following drought earlier this year, is stronger than the average expectation of economists

7

Kiwis live in Middle Earth on Pandora

Here’s an interesting tidbit: The next three Avatar films will be made in New Zealand, the Prime Minister has announced at a press conference with the film’s director James Cameron. Mr Key announced this morning that the Government had signed a memorandum of understanding with the film’s makers to secure the multi-film deal. He said

21

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

34

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

6

RBNZ sees macroprudential working

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.

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

20

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

20

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

36

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

11

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

4

RBNZ: LVR limits to hit house prices by 4%

From Banking Day, the RBNZ has high hopes for the efficacy of its new LVR rules: The bank’s regulatory impact statement on the speed limit announced on Tuesday said the Reserve Bank’s modelling suggested the limit could reduce credit growth by 1-3 percentage points in the first year. Mortgage lending grew 5.4 per cent or

38

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

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

8

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