The Loan to Value restrictions introduced in October last year seem to have at least partly met the Reserve Banks goal of ensuring financial stability in the event of a sharp correction in house prices. Perhaps at the lower end of the market anyway.
The restrictions have hit sales of cheaper homes the hardest, as highlighted by the RBNZ in a report today.
Sales of properties for less than $NZ400,000 fell 23 per cent between October and March. In addition, First-Home buyers share of the total home sales fell to 17 per cent in February from an average 20 per cent in the past two years, it said.
In relation to when the restrictions may be eased the comment was..“However, we will need to be confident that immigration pressures will not cause a resurgence of house price inflation. We consider that the earliest date for beginning to remove the LVR restrictions is likely to be late in the year.”
At the other end of the market it was interesting today to watch 3 bidders have a gentle tussle over a substantial luxury home of 4 bedrooms @ 1 Canterbury Place in Parnell. Knocked down eventually under the hammer @ $3,255,000.