Could the Reserve Bank (RBNZ) be preparing to introduce some sort of tool aimed specifically at cooling the Auckland housing market and leaving the rest of the country alone?
Perhaps, based on comments from RBNZ deputy governor and head of operations Geoff Bascand.
Bascand has been quoted by the Otago Daily Times hinting at such a move.
With Auckland house prices going up from what was already a "very, very high level," the RBNZ was considering whether action was appropriate, Bascand was reported saying after a Queenstown Chamber of Commerce function.
Asked if action would target particular regions, he said the RBNZ was working through that.
''We're reconsidering that - it's a time of close scrutiny.''
An RBNZ spokesman told interest.co.nz Bascand was reported accurately, but the RBNZ had nothing further to add today.
On Wednesday morning the RBNZ is due to release its bi-annual Financial Stability Report with a press conference with governor Graeme Wheeler to follow.
When it introduced restrictions on banks' high loan-to-value ratio (LVR) residential mortgage lending in 2013 the RBNZ suggested that, in principle, LVR restrictions could be targeted at particular geographic regions such as Auckland.
"However, the use of targeted restrictions is not contemplated at this point. Geographic targeting would be administratively complex, and would require difficult decisions to be made defining ‘problem’ areas," the RBNZ said in 2013.
"Furthermore, feedback to the Reserve Bank’s March 2013 macro-prudential consultation was that exemptions of large categories of borrowers, such as first home buyers, or more targeted restrictions, such as lending to ‘Auckland’, would be more complex and costly for banks to implement, and difficult for the Reserve Bank to monitor and enforce."
News expected on loans to residential property investors
With the release of its Financial Stability Report the RBNZ is expected to provide an update on its plans to carve out bank loans to residential property investors as a new asset class for banks. The RBNZ has consulted with banks on three ways mortgage loans to residential property investors could be defined as it works to establish the new asset class. It says the move is partly to facilitate the introduction of a macro-prudential property investor policy should that become necessary.
Currently investor mortgages are treated the same as owner-occupier mortgages for regulatory capital purposes. The establishment of a new asset class for them means banks will have to hold more capital against such loans, potentially making loans more expensive for property investors.
eputy governor Geoff Bascand told the Otago Daily Times yesterday Auckland's house price rises - up almost 17% in the year to March, fuelled by migration and investors - have started to distinguish the region from the rest of the country.
''They are going up from what's already a very, very high level,'' he said after a Queenstown Chamber of Commerce function yesterday.
''So we are carefully considering whether action is appropriate,'' Mr Bascand said.
Asked if action would target particular regions, he said the bank was working through that.
He added: ''Previously we've indicated we think that's quite difficult - but perhaps there may be new ways of it getting a little bit more possible.
''We're reconsidering that - it's a time of close scrutiny.''
- See more at: http://www.odt.co.nz/news/business/341607/action-housing-market-possibl…e Otago Daily Times yesterday Auckland's house price rises - up almost 17% in the year to March, fuelled by migration and investors - have started to distinguish the region from the rest of the country.
''They are going up from what's already a very, very high level,'' he said after a Queenstown Chamber of Commerce function yesterday.
''So we are carefully considering whether action is appropriate,'' Mr Bascand said.
Asked if action would target particular regions, he said the bank was working through that.
He added: ''Previously we've indicated we think that's quite difficult - but perhaps there may be new ways of it getting a little bit more possible.
''We're reconsidering that - it's a time of close scrutiny.''
- See more at: http://www.odt.co.nz/news/business/341607/action-housing-market-possibl…e Otago Daily Times yesterday Auckland's house price rises - up almost 17% in the year to March, fuelled by migration and investors - have started to distinguish the region from the rest of the country.
''They are going up from what's already a very, very high level,'' he said after a Queenstown Chamber of Commerce function yesterday.
''So we are carefully considering whether action is appropriate,'' Mr Bascand said.
Asked if action would target particular regions, he said the bank was working through that.
He added: ''Previously we've indicated we think that's quite difficult - but perhaps there may be new ways of it getting a little bit more possible.
''We're reconsidering that - it's a time of close scrutiny.''
- See more at: http://www.odt.co.nz/news/business/341607/action-housing-market-possibl…e Otago Daily Times yesterday Auckland's house price rises - up almost 17% in the year to March, fuelled by migration and investors - have started to distinguish the region from the rest of the country.
''They are going up from what's already a very, very high level,'' he said after a Queenstown Chamber of Commerce function yesterday.
''So we are carefully considering whether action is appropriate,'' Mr Bascand said.
Asked if action would target particular regions, he said the bank was working through that.
He added: ''Previously we've indicated we think that's quite difficult - but perhaps there may be new ways of it getting a little bit more possible.
''We're reconsidering that - it's a time of close scrutiny.''
- See more at: http://www.odt.co.nz/news/business/341607/action-housing-market-possibl…
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