The Reserve Bank is proposing to restrict the amount of lending banks can do above an LVR of 80 percent to 10 percent of all new loans, down from 20 percent at present.
This will of course simply shift the portion of the lending that is over the 80 level from the big 4 Banks to the many Banks of Mum and Dad…
It’s described as a process of tackling “financial stability risks” .
The Deputy Guv has even raised the spectre of “negative equity”.
Seems a bizarre topic to be raising given the Auckland property market in particular is still rising at a 2% a month pace.