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Finance Minister Grant Robertson says it is up to the Reserve Bank to decide whether to ease Loan to Value ratio restrictions for home buyers but the Government remains concerned about their impact on first home buyers.
The Reserve Bank will release its Financial Stability Report tomorrow which is expected to signal the Reserve Bank's intentions for the LVR restrictions it put in place in 2013 to try to ease the Auckland property market.
Robertson said there had been some softening in the property market but there were still underlying issues to address, including the supply of affordable housing and some of Labour's measures would take time to have an effect.
"We from the beginning have been concerned about the impact of LVRs on first home buyers. Obviously we've seen some change in the balance in the housing market between investors and first home buyers. We want to do everything we can to support first home buyers in. That remains our chief concern with the implementation of LVRs."
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Advertise with NZME.He said Labour had also been clear that it did not favour debt to income ratios.
The LVRs mean most home buyers need at least a 20 per cent deposit to get a mortgage. Since October last year, those buying investment properties have needed 40 per cent deposits.
Robertson believed the Reserve Bank would look at the effect Labour's plans to extend the 'bright line' test from two to five years would have on demand, as well as Labour's plans to boost housing supply over time through KiwiBuild.
"The issue is that they take a little bit of time to come on stream."
National's finance spokesman Steven Joyce said he had asked the Bank to start signalling how they would unwind LVRs in the middle of the year when he was Finance Minister. "But ultimately it's over to them when they do that."
"I think it is important that the Bank starts to signal under what conditions it would ease off the LVRs. There's no doubt Auckland and Christchurch housing prices are now flat, but they will obviously be wanting to think about whether that will continue or not."
Robertson will deliver his first major speech as Finance Minister on Friday and said that would focus on the Government's economic strategy and its 'high-level' goals for the economy.
Joyce said it was past time the Labour-led Government started to set out its "fiscal ambitions" and he hoped the speech would deliver that.