No case to end LVRs – S&P

In a new update on New Zealand’s banking sector, the credit rating agency said risks stemming from rising house prices and household debt levels have stabilized in 2017.

But housing-related downside risks remain elevated and the unwind of both house prices and credit growth has some way to run before the risks subside.

S&P’s director of financial institutions ratings, Nico de Lange, said that house price growth has slowed down noticeably in the past year including, importantly, in Auckland.

That’s due to a number of factors including the Reserve Bank’s third round of LVRs, a tightening bias from the banks, affordability and serviceability issues and interest rate repricing.