New rules on low-equity mortgages could become stricter yet, with international evidence showing the effect on house prices tends to be “modest and short-lived”.
The Reserve Bank last week announced its restrictions on high loan-to-value ratio (LVR) lending would come into force from October 1.
The central bank is concerned about the rapid rise of house prices, and the potential risks that poses to the economy.
Westpac senior economist Michael Gordon reviewed four case studies of countries where LVR limits have been introduced and found mixed results.
Read the rest here: