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Serviceability restrictions as a potential macroprudential tool in New Zealand

In June 2017, we sought feedback about risks posed by high debt-to-income (DTI) lending and the potential for a DTI limit or similar policy to mitigate the risks. We published consultation submissions and our response to the consultation in November 2017.

Consultation opened:
Consultation closed:
Published:
Status:
Closed

On 8 June 2017 we released a consultation paper and sought feedback from stakeholders on topics such as:

  • the risks posed by high-DTI lending and the potential for a DTI limit or similar policy to mitigate them
  • alternative policies under our control and how they would compare to a DTI limit
  • desirable design features for any DTI policy and the potential costs and benefits.

Download the consultation paper: Serviceability restrictions as a potential macroprudential tool in New Zealand (PDF 1.3MB)

The consultation paper outlined our view on these issues. We said we would not implement a DTI policy in current market conditions, but we believe it could be a useful option in the future. 

The consultation paper included a cost-benefit analysis which considered the potential costs and benefits of implementing a DTI policy. It found there could be significant net benefits.

Our response and submissions

On 23 November 2017 we published a response to the submissions.

Response to submissions on serviceability restrictions as a potential macroprudential tool in NZ (DTI) consultation (PDF 109 KB)

We received 27 responses to the consultation from banks, professional bodies and individuals. Some information has been withheld from these published responses to protect privacy, or because it is confidential to the respondent.

Alistair Coster (PDF 143KB)
Anonymised response (PDF 253KB)
ANZ response (PDF 7.2MB)
ASB Bank response (PDF 111KB)
Bin Sun response (PDF 45KB)
BNZ response (PDF 146KB)
Co-op Bank response (PDF 313KB)
David Liu response (PDF 67KB)
David Mayes response (PDF 123KB)
Florence Dai response (PDF 196KB)
HSBC response (PDF 168KB)
Ian Harrison response (PDF 1.2MB)
John Walley response (PDF 236KB)
Kay Robertson response (PDF 13KB)
Kiwibank response (PDF 564KB)
Michael Reddell response (PDF 695KB)
Murray Jackson response (PDF 824KB)
NZ Bankers Association response (PDF 1.7MB)
NZ Manufacturers and Exporters Association response (PDF 247KB)
NZ Property Investors Federation response (PDF 139KB)
Penny Cowie response (PDF 37KB)
Peter Lewis response (PDF 127KB)
Property Institute of NZ response (PDF 171KB)
Shirish Mahashabde response (PDF 39KB)
Tim Burns response (PDF 65KB)
Varun Kapoor response (PDF 29KB)
Westpac response (PDF 274KB)