Well that escalated quickly. Within the space of a few weeks in mid July, the Reserve Bank was forced into an urgent introduction of a third round Loan to Value Ratio (LVRs) for rental property investors.
A combination of pressure from a Government desperate to put out the fire in the housing market and a sharp rise in the currency forced the central bank to take action earlier than it wanted.
As recently as July 7, Deputy Reserve Bank Governor Grant Spencer talked about a new round of LVR controls that “could potentially be introduced by the end of the year.” Rather than moving quickly to tighten and extend its LVR limits for Auckland investors, Spencer said the bank saw itself as part of a “team” and the Government needed to address tax incentives for investors and review migration settings. The next day Prime Minister John Key again urged the bank to “get on with it” and rejected the calls for further tax changes or a migration review.
A combination of pressure from a Government desperate to put out the fire in the housing market and a sharp rise in the currency forced the central bank to take action earlier than it wanted.
As recently as July 7, Deputy Reserve Bank Governor Grant Spencer talked about a new round of LVR controls that “could potentially be introduced by the end of the year.” Rather than moving quickly to tighten and extend its LVR limits for Auckland investors, Spencer said the bank saw itself as part of a “team” and the Government needed to address tax incentives for investors and review migration settings. The next day Prime Minister John Key again urged the bank to “get on with it” and rejected the calls for further tax changes or a migration review.
