Poll: time is up for LVRs

Property Institute survey shows Kiwis don't expect big capital gains from housing

Poll: time is up for LVRs
After the dramatic fall in house price growth expectations, it is time to drop the loan-to-value lending restrictions (LVRs), says Property Institute of New Zealand chief executive Ashley Church.

Church's comment follows the latest Property Institute survey that shows most New Zealanders don't expect big capital gains from the housing, which he said should signal a relaxation in LVRS.

“We’ve been running this poll for a year now and since last November there’s been a massive swing away from people expecting price rises, with almost 50% picking prices to stay the same and another 25% expecting prices to decrease,” Church said.

The report shows that in November only 18% of Kiwis expect prices to rise in the next six months, compared to the 56% from the same period a year ago.

“This has been the trend for some time now, and it’s clearly a reflection of these artificial lending restrictions – so the Reserve Bank should be taking steps sooner rather than later to relax its loan-to-value ratios to ensure the engineered slowdown in the housing market doesn’t turn into an out-of-control slump,” he said.

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