LVR restrictions picked for Aucklanders

A poll of economists showed that several thought Reserve Bank Governor Graeme Wheeler was looking increasingly likely to deploy macroprudential tools to tackle the heat in the Auckland property market.

He has a fine balancing act on his hands: To weigh up the weakness of the rest of the economy against the need to restrain house prices.

He could avoid blunting other sections by opting for a tool other than an official cash rate hike.

The economists said the most likely tool was a loan-to-value (LVR) restriction, so that people cannot fuel the market by buying expensive properties with very little money down. They said it would likely be variable, to target the areas where the market was strongest.