A real estate boss says tighter lending restrictions in the Auckland property market could be good news for Whanganui.
The Reserve Bank is looking at the possibility of new lending restrictions or tightening existing ones such as those on loan-to-value ratios (LVRs) in the Auckland market.
Reserve Bank Governor GraemeWheeler said imbalances in the housing market were increasing with house price inflation lifting again in Auckland.
Mr Wheeler said debt-to-income restrictions could be one response to rising house prices.
The restriction was used in Britain where most buyers could not get a mortgage higher than 4.5 times their annual income.
Property Brokers Wanganui branch manager Philip Kubiak said many people from out of town had been showing an interest in Whanganui property over the past year.
He thought the tighter restrictions would drive more buyers towards Whanganui.
"It's great news for us - we're in a very positive, buoyant market."
Aucklanders were making up the majority of new arrivals to Whanganui, though buyers were also coming from other larger centres.
Mr Kubiak said something had to be done about the "out of control" Auckland market. The Government needed to speed up the building of new housing.
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. In March this year those loans had fallen to 7.9 per cent of the total.
