LVR Restrictions Will Hurt – Westpac

Westpac have obviously been reading my posts in order to come up with the same opinion as me – but better late then never.

RBNZ housing plan will help property investors, maintain rising prices
Tina Morrison | Thursday August 01, 2013

The Reserve Bank’s plan to restrict the number of low equity mortgages will hobble first home buyers while helping property investors, ensuring house prices keep marching higher, Westpac Banking Corp economists say.

The central bank, concerned about spiralling house prices causing financial instability, is expected to bring in new loan-to-value ratio tools to force lenders to limit low equity borrowing as early as this month.

The bank may say only 12 percent of new mortgages can be given to borrowers whose deposits amount to less than 20 percent of the loan, Westpac economists say in a note.

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