The Auckland housing market slowed by 30% in July causing REINZ and the Prime Minister to call for the LVR restrictions to be reviewed, possibly marking the beginning of the end for these restrictions.
Originally created to slow down the Auckland market, after reports on the recent market change Bill English said this week, “It's important that the people who put them in place have thought through the conditions under which they remove the LVRs, because ideally they are not a permanent feature of the market".
He followed this saying that there has been consultation between the government and the Reserve Bank about lending restrictions based, on what people earned.
However, on the other side of the house, Jacinda Ardern says Labour doesn’t support the LVR rules and would like the restrictions to be removed, showing neither parties are happy with the current restrictions in place.
Though ultimately the decision lies with the Reserve Bank, the support of both party leaders to remove or at least significantly weaken the restrictions is positive news for those rental property investors and first-time buyers who find finance difficult at the high LVR rates.
Quinovic Wellington Property Managers
Article written: August 2017