Reserve Bank governor Graeme Wheeler has indicated that he wants LVR restrictions as a way to shore up stability and take the heat out of the housing market.

The introduction of “speed limits” to curb the amount of lending banks do to customers with small deposits is likely soon. There have been reports an announcement may be made as early as next month.

PAA general manager Jenny Campbell said brokers outside Auckland were particularly worried about how that would affect their clients.

The organisation has made a submission to the Reserve Bank, asking it not to make it harder for first-home buyers to purchase properties. “Regional brokers wanted us to take a strong position.”

While Auckland’s property prices are rising strongly, most other regions’ prices are only increasing slowly.

The introduction of across-the-board restrictions, as Wheeler has suggested, could take the wind out of regional economies that were still struggling. Campbell said: “All you ever hear about is the Auckland property market but it’s still quite difficult to get high-LVR lending in the regions.  This would make it even more difficult.”

Campbell said there was no evidence that high LVR loans were easy to get or that those borrowers were any more likely to default.  Borrowers who were not able to get high-LVR loans would likely go to second-tier lenders, she said.

Campbell said servicing ability was more important than the size of a deposit when banks were considering whether to lend to borrowers. “We’re still a long way from the days of 100% lending. It is actually quite difficult to get a high LVR loan.”