Housing market weakening, but lifting of LVRs unlikely until at least mid-2018

New Zealand’s housing market is slowing, but calls for a swift lifting of lending restrictions seem likely to go unheeded.

A sharp drop in sales and early signs of falling prices have prompted some in the real estate sector to claim it is time for loan to value ratio (LVR) lending restrictions, which constrain the amount of lending banks can make to those with small deposits, to be lifted.

National leader Bill English called for the Reserve Bank to outline when the rules could be relaxed, although the central bank has not made its plans clear.

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A slowdown in the housing market has prompted calls for lending restrictions imposed on banks to be lifted, but economists do not expect changes to be made until at least mid-2018.

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