LVR loosening under review: Bascand
The Reserve Bank's long-awaited Financial Stability Report is due on 28 November. Bascand said loosening would be under review but echoed comments from Reserve Bank officials, who said last week LVR easing would be weighed up against other risks in the housing market.
Under current restrictions set by the Reserve Bank, investors need a minimum 35% deposit, and owner-occupiers require at least 20% to buy an existing property.
In a speech in Sydney, Bascand said the bank would address whether LVR levels were right for the current market: "Our risk tolerance for the recent housing and credit boom is implied by our calibration of the loan-to-value restrictions. We keep these settings under review and will publish our next assessment of them in the upcoming FSR."
He added RBNZ noted a stabilising market, in part driven by banks' credit tightening. Bascand hinted the central bank was reviewing whether or not to loosen LVR, as risks reduced in the banking system.
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