Criteria for lifting LVR rules reviewed soon: Wheeler
It had been predicted that the LVR rules might be lifted by the end of this year.
In a speech this morning opening the BIS Cross-Border Financial Linkages Conference in Wellington, Reserve Bank governor Graeme Wheeler did not give any indication of when the rules might be relaxed.
He said they had led to a significant reduction in high-LVR lending, a drop in sales and a fall in house price inflation. “While other factors, such as subsequent interest rate increases over the period March 2014 to July 2014 are also helping to constrain demand, annual house price inflation fell from around 10% to 5% currently, despite high levels of net immigration.”
He said while LVR rules had a financial stability goal, they were also an important part of the bank’s monetary policy assessment.
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