The Reserve Bank today said that high loan-to-value ratio (high-LVR) residential mortgage lending had fallen to 5.6 percent for the six months to the end of March 2014.
Deputy Governor Grant Spencer said: "Our initial assessment is that restrictions on high LVR lending helped reduce house price inflation. A more in-depth assessment of the policy and its impact on the housing market will be included in next month's Financial Stability Report."
All banks have complied with rules that restrict high-LVR residential mortgage lending to no more than 10 percent of total new mortgage lending. In September 2013, before the introduction of the new rules, high-LVR lending was approximately 25 percent of all mortgage lending.
The restriction came into force on 1 October last year and 31 March 2014 was the end of the first six month period over which all registered banks had to comply. Future compliance with the high-LVR lending rules will be measured against a 3-month rolling average for banks with more than $100 million per month of mortgage lending (ANZ, ASB, BNZ, Kiwibank and Westpac) and a 6-month rolling average for banks with less than $100 million per month of mortgage lending.
High-LVR loans are those that are made to someone borrowing more than 80 percent of the value of the property that is mortgaged.
The latest data is available on the C30 page.
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