The Reserve Bank has confirmed it will reimpose loan to value ratios (LVRS) from 1 March at 20 percent for first home buyers and 30 percent for property investors.
From May 1 investors will have 40 percent LVR limit.
RBNZ says it’s concerned about the risk a sharp housing correction could have on financial stability.
RBNZ deputy governor Geoff Bascand said there was evidence of speculation and growth in heavily indebted people, which would threaten financial stability if there was a sharp housing downturn.
LVRs were suspended at the start of the pandemic but most major banks reimposed the limits at the end of last year.
More to come…