RBNZ is reinstating LVR restrictions to pre covid level

The Reserve Bank of New Zealand says that it is putting in place more stringent LVR restrictions to reduce risks to financial stability caused by high-risk mortgage lending

More statements

• LVR restrictions do not apply to new residential construction.
• Says now concerned about the risk a sharp correction in the housing market poses for financial stability.
• Says there is evidence of a speculative dynamic emerging with many buyers becoming highly leveraged.
• Says as of 1 March the reserve bank will be reinstating LVR restrictions at the same level they were set at prior to the onset of covid-19.
• Says further tightening of investors’ restrictions taking effect on 1 May.

The news has not impacted the forex space as this was well telegraphed in prior statements from the bank.