New build LVR exemption welcomed

The New Zealand Bankers’ Association has today welcomed the Reserve Bank’s move to exempt new residential construction loans from the loan-to-value (LVR) restrictions it introduced on 1 October.

“We’ve said all along that supply has always been the issue in parts of the housing market, not the availability of cheap credit,” said New Zealand Banker’s Association chief executive Kirk Hope.

“We agree that this move will help to support the supply of new housing and reduce pressure on demand in the New Zealand housing market. We support any moves to address the supply issue.

“The Reserve Bank’s response shows flexibility and an ability to respond to industry concerns. We applaud them for taking on board the feedback provided by banks and the construction industry.

“This move complements the government’s efforts to address the housing supply issue in Auckland,” Hope said.