DTI restrictions to bed in next year
Although the Reserve Bank (RBNZ) hasn’t said it will introduce DTIs, it has indicated March next year is the date they will become a formal tool along with LVRs to restrict residential mortgage lending.
Davidson says they will be activated next year, but it won’t be to curb lending in this housing cycle but for subsequent cycles so house prices never rise 40% over two years as they did during the Covid pandemic.
Davidson says last week’s RBNZ release about the debt-to-income ratios didn’t say anything new. “There was no indication of the limit – whether it would be five, six or seven times income – exemptions or speed limits.
“It was to keep DTI restrictions in front of people to remind them the RBNZ was still looking at it and it could introduce it.”
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