“We are focused on ensuring borrowers are resilient to a range of future economic and financial conditions,” reserve bank deputy governor Geoff Bascand said in a statement on Tuesday.
“We are particularly concerned about those who have borrowed in the past 12 months at high LVRs (loan-to-value ratios) and high DTIs.
“If house prices were to fall, some buyers could face the possibility of negative equity – which means the value of their property is below the outstanding balance on their mortgage,” he said.
The announcement came a day after New Zealand’s human rights commission announced it was launching an inquiry into the housing crisis, labelling it a “massive human rights failure”.
Reserve Bank considers tighter mortgage lending standards
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Reserve Bank prepares to crack down on housing
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Press Release – Reserve Bank The Reserve Bank Te Ptea Matua is today welcoming views on an interim Solvency Standard for insurers, which will determine the minimum amounts of capital that insurers must hold. The interim standard is needed in order to take account …
The Reserve Bank – Te Pūtea Matua – is today welcoming views on an interim Solvency Standard for insurers, which will determine the minimum amounts of capital that insurers must hold.
The interim standard is needed in order to take account of upcoming changes to the accounting rules (IFRS 17) and to incorporate feedback on our current solvency standards. It has been designed so that policyholders can be comfortable that an insurance company has enough funds to meet its promises to policyholders, even if it fails, Deputy Governor and General Manager of Financial Stability Geoff Bascand says.