In the past couple of years, borrowers and bankers haven't thought of money as being in short supply.
If you could afford a loan with interest rates at 5 per cent, your bank would say yes with a big welcoming smile. You could even expect them to fight among themselves to lend you that money.
A third of all new loans are for loan-to-value ratios of more than 80 per cent - double what it was a year ago. Annualised lending growth has almost quadrupled to 4 per cent in the last year. Banks are easily finding funds to lend on LVRs of 90 to 95 per cent. Only in recent months has lending growth exceeded growth in term deposits. Even so, it's easy and cheap again for banks to supplement their stocks by borrowing in hot money markets offshore.
Mortgages are piled high and cheap. The implied threat that borrowers should buy now while stocks last just wasn't credible after almost five years of record-low interest rates and escalating mortgage market skirmishes between banks.
In a surprise move, the Reserve Bank announced it was considering increasing capital requirements for high LVR loans.
This would force banks to ration high LVR loans, most likely by increasing the interest rate. That contrasts with the current situation in which often the riskiest loans to the most stretched customers with the least equity get the lowest interest rates as banks fight for market share.
We know the Reserve Bank is serious and that banks are worried. For borrowers, that means if you were waiting until later this year or next year to get a high LVR mortgage, you may want to hurry.
The Reserve Bank has given banks until April 16 to respond and seems keen to move quickly. It is also working on so-called macroprudential controls that could include actual limits on LVRs, which would stop banks from offering 95 per cent loans.
Even the National Government seems resolved to curb the housing boom to avoid the Reserve Bank using its blunt instrument of an interest rate hike that would hit all borrowers.