A real estate boss says new lending restrictions being hinted at for the Auckland housing market could increase competition among property buyers in Hawke's Bay.

The Reserve Bank has indicated it is looking at the possibility of introducing new lending restrictions or tightening existing ones such as those on loan-to-value ratios (LVRs) in the Auckland market.

Reserve Bank Governor Graeme Wheeler said imbalances in the housing market were increasing with house price inflation lifting again in Auckland, after cooling in late 2015 and early 2016 following new restrictions in investor loan-to-value ratios and Government measures introduced in October.

Leaders real-estate agency managing director Elanor MacDonald said she wouldn't be surprised if the tightened restrictions resulted in more Aucklanders moving to Hawke's Bay. There were already a number of Aucklanders looking at housing in the region, she said.


Mr Wheeler said debt-to-income restrictions could be one of the potential responses to rising house prices. The restriction was used in the UK, where most buyers could not get a mortgage higher than 4.5 times their annual income.

The Reserve Bank said it would prefer the restriction to apply broadly, rather than singling out Aucklanders or investors.

Ms MacDonald said that restriction could have a negative impact on Hawke's Bay if applied there.

"Because Hawke's Bay is traditionally not a high-income area, I could see that having an effect on our first-home buyers and maybe some of our families in terms of what sort of property they may be able to get into."

Hawke's Bay people might also face competition from buyers coming from out of town, she said.

"I don't think it would be particularly good news for our residents. The only good side of that would be if we were to see capital gain from the increased competition."

She didn't think the measures would help the Auckland market, as the city had a supply problem.

"They should be spending all of their collective brain cells sorting that out," said Ms MacDonald.

The amount of high loan-to-value ratio home lending by banks has tumbled since the Reserve Bank in October 2013 imposed a 10 per cent speed limit on lenders writing residential mortgages with a deposit of less than 20 per cent. It added Auckland-specific restrictions last November.

Banking mortgage lending at LVRs above 80 per cent were at 25 per cent of total home lending in September 2013, before the first restrictions were imposed. In March this year those loans had fallen to 7.9 per cent of the total. NZME