New bank tools possibly days away: BNZ
Head of research Stephen Toplis has issued a commentary highlighting how concerned the central bank is about house prices rising – from a point where they were already considered overvalued.
Toplis said the speed with which the Bank had implemented its macroprudential tools – including the ability to enforce loan-to-value restriction – indicated it wanted to use them as soon as possible.
“This reflects the fact that house price inflation continues to accelerate at a time when the central bank already considers houses to be overvalued. In turn, it believes that the banking sector is increasingly vulnerable to what will inevitably be (though we have no clue when) a future house price correction.”
Toplis said he supported the Reserve Bank’s moves to discourage speculators, particularly in Auckland.
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