The Reserve Bank has rejected claims that its curbs on low-deposit mortgage lending will have the perverse effect of reducing how much new housing gets built.

In a speech to the Property Council in Auckland this morning deputy governor Grant Spencer reiterated why the bank has imposed a ‘speed limit’ on high loan-to-value ratio (LVR) lending, what its best guess of the impact will be and the indicators it will be watching to decide when to remove the restrictions.

While the bank estimates that house price inflation will be between 1 and 4 percentage points lower than it would otherwise be over the year ahead, Spencer said house prices would still remain high relative to incomes and rents.]

source: Loan rules won’t hit home builds, says Reserve Bank – Property – NZ Herald News.