Risks in new RBNZ proposal
The Reserve Bank is “seriously considering” introducing further lending restrictions in a bid to counteract the heat in the housing market.
Governor Graeme Wheeler made the announcement in the media conference following the release of the bank’s Financial Stability Report.
While the FSR itself highlighted the bank’s concerns about the housing market, it did not discuss potential macro-prudential options.
However, Wheeler and Deputy Governor, Grant Spencer, were more forthcoming on the topic in the media conference – and it seems one strong possibility is the introduction of debt-to-income ratios.
The prospect of debt-to-income ratios was first raised last year.
At the time, the Reserve Bank said it was doing work on what might be possible in the area, but had no concrete plans to introduce debt-to-income ratios.
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