NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Banking and finance

Home lending restrictions could ease again by year end: economist

Tamsyn Parker
By Tamsyn Parker
Business Editor·NZ Herald·
30 May, 2018 02:00 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Home lending restrictions could be eased by the end of the year, according to one economist. Photo/Dean Purcell.

Home lending restrictions could be eased by the end of the year, according to one economist. Photo/Dean Purcell.

Home lending restrictions could be eased again by the end of this year, an economist is predicting.

The Reserve Bank left property loan restrictions on hold today after easing them slightly in January.

Loan-to-value ratio restrictions have been in place since October 2013, requiring most home buyers to have a 20 per cent deposit.

FOR MORE PROPERTY NEWS AND LISTINGS GO TO ONEROOF.CO.NZ

In January they were eased to allow banks to lend up to 15 per cent of their new lending to owner-occupiers with a deposit of less than 20 per cent - up from 10 per cent.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

At the same time the cap for lending to investors eased to allow the banks to lend up to 5 per cent to investors with equity of less than 35 per cent - down from 40 per cent equity.

Michael Gordon, senior economist at Westpac, said while there were no changes to the restrictions this time he expected that to change by the end of the year.

"We expect an easing by year-end as new Government policies weigh on investor demand for housing."

Advertisement
Advertise with NZME.

In its financial stability report released today the Reserve Bank said that household mortgage debt remained high.

"However, financial risk has lessened with both lending and house price growth slowing in the past 12 months – in part due to our imposition of loan-to-value (LVR) ratio restrictions."

But it said lending growth needed to be further sustained before it gained enough confidence to ease restrictions again.

Reserve Bank governor Adrian Orr said it would be looking to at least the next financial stability report before it made any further decisions on easing lending restrictions.

Discover more

Business

'Absolutely no person is to enter' house for sale

15 Jun 06:50 AM
Business

'Absolutely no person is to enter' house for sale

17 Jun 04:16 AM
Editorial

Editorial: Affordable homes top list of priorities

24 Jun 05:00 PM

The next report is due out at the end of November.

"It is still early days around the slower credit growth we have observed," Orr said at a press conference held after the release of the report.

Credit growth - or the amount of money the banks are lending out - has slowed to 6 per cent in the last year which was still slightly above income growth.

While the growth in house prices had slowed to 4 per cent in the year to April.

Reserve Bank governor Adrian Orr said it would be looking to at least the next financial stability report before it made any further decisions on easing lending restrictions. Photo / Dean Purcell
Reserve Bank governor Adrian Orr said it would be looking to at least the next financial stability report before it made any further decisions on easing lending restrictions. Photo / Dean Purcell

Orr said one challenge for the banking sector was that while the loan restrictions had an impact on new lending it would take a long time before the average risk levels across bank loan books became more comfortable.

The central bank's report said the continued stabilisation, or a further reduction, in the growth rates of household debt and house prices, would be required before the risk
to the financial system was normalised.

Advertisement
Advertise with NZME.

Gordon said despite the vagueness of the Reserve Bank's criteria for easing loan restrictions he believed they would be met before the end of the year.

"The Government is introducing a series of new policies aimed at cooling investor demand for housing, one of which is already in play: the extension of the 'bright line' test for taxation of capital gains came into effect at the end of March."

Gordon said house sales and prices were fairly muted in April and the bank expected that to be repeated over the coming months.

"We are forecasting annual house price growth to slow to zero by the end of this year."

That may be more pessimistic than the central bank's own predictions.

Deputy governor Geoff Bascand said today he expected house price growth to have a moderate track over the next few years rising at about 2 to 3 per cent a year.

Advertisement
Advertise with NZME.

Orr also said some of the Reserve Bank's reluctance to ease restrictions was around what the banks would do.

"Our challenge around confidence is to think what would happen in the absence of these LVRs. Would banks go back to their less prudent lending behaviours or would they have picked up a lesson?"

He said this issue would be part of its conduct inquiry into the banks and it would be talking to them about their lending horizons.

Save

    Share this article

Latest from Banking and finance

Premium
Banking and finance

'Firepower to help': Small business lender raises $200m capital for new loans

Banking and finance

Rishi Sunak returns to Wall Street bank he joined as intern

Premium
Companies

NZ’s largest taxpayers revealed - does big business play fair?


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from Banking and finance

Premium
Premium
'Firepower to help': Small business lender raises $200m capital for new loans
Banking and finance

'Firepower to help': Small business lender raises $200m capital for new loans

The funds will support financing in sectors like construction and healthcare.

14 Jul 03:00 AM
Rishi Sunak returns to Wall Street bank he joined as intern
Banking and finance

Rishi Sunak returns to Wall Street bank he joined as intern

09 Jul 12:07 AM
Premium
Premium
NZ’s largest taxpayers revealed - does big business play fair?
Companies

NZ’s largest taxpayers revealed - does big business play fair?

01 Jul 05:00 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP