The head of the country's largest real estate agency believes the changes the Reserve Bank is proposing to make to high loan-to-valuation ratio (LVR) restrictions on home loans will do little to solve Auckland's housing problems, but should provide some benefit in the rest of the country.
Harcourts chief executive Hayden Duncan said the new LVR restrictions for Auckland property investors that the Reserve Bank announced, would not address the fundamental problems with the region's housing market.
"Ultimately, Auckland is suffering from a lack of housing," he said.
"The demand and supply imbalance is so great that even if some property investors are removed from the equation, or choose to purchase outside of Auckland, there will be plenty of buyers to take their place.
"We have a growing population in Auckland that needs both rental accommodation and property to buy.
"Penalising property investors who are providing the rental accommodation will not solve Auckland's supply shortage.
"The only real solution is to build more housing and that's something the Auckland Council and government need to work together on."
Duncan said the silver lining in the Reserve Bank's announcement was the easing of LVR restrictions outside of Auckland.
"The amendment to the LVR restrictions will open the door for more first home buyers outside of Auckland to enter the property market," he said.
"The change is more conservative than than we would like to see, but every little bit helps."
The Reserve Bank is proposing to limit the amount banks can lend on residential investment properties in Auckland to 70% of a property's valuation, which would require a minimum 30% deposit.
However investors will still be able to purchase properties outside of Auckland with no more than a 20% deposit.
Duncan said the change would be likely to encourage more investors to buy outside of Auckland, which could stimulate the housing markets in places like Wellington, Hamilton and the western Bay of Plenty.
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