Regulatory Alerts2022-05-17
Regulatory Impact Assessment for 2016 LVR Changes
The Reserve Bank of New Zealand issued this assessment to justify tightening Loan-to-Value Ratio restrictions effective October 1, 2016, to mitigate systemic financial risks from the housing market boom. The policy imposes nationwide speed limits capping investor lending above 60% LVR at 5% and owner-occupier lending above 80% LVR at 10%, while removing previous regional differentials. These measures aim to reduce household debt vulnerability and prevent a severe housing downturn that could destabilize the banking system and broader economy.
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