Are we creating a nation of renters for life?
Time will tell.
From my experience, as soon as you introduce controls on any activity, you create another industry on how to get around them.
Hyper-Inflation is one danger as people try to get around controls and pay any price to move forward.
RBNZ praised for housing stance
Peter Orszag, vice chairman of corporate and investment banking at Citigroup, wrote a piece for Bloomberg news agency this week, complimenting New Zealand’s central bank for stepping in to stop a potential housing bubble.
“Perhaps the Federal Reserve has something to learn from the central bank of New Zealand about how to manage a mortgage market,” he said.
Asked for its reaction, a Reserve Bank spokesman said the bank did not generally comment on feedback, good or bad.
Orszag said the bank’s curbs on low-deposit mortgages were timely, given that New Zealand house prices were now more than 20 per cent above their historical average.
Limits on high “loan-to-value ratio” mortgages were not just being seen in New Zealand but now in Canada, Israel, Singapore and Sweden, he said.