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Loan restrictions wont slow building

Loan restrictions wont slow building: Reserve Bank - Mortgages - NZ Herald News

I read the article below and my immediate thought was the old quote “There are lies, damn lies and Statistics”

Graeme Wheeler states that New Builds only makes up 3 to 4% of the entire lending market however the problem with that kind of argument is that it doesn’t address the actual issue, in other words what of 50 or 60% of the new build market needs to borrow over 80% then you lose more than half of all the new builds….that is a problem for the building industry and the property market as a whole because you need new homes to be built to provide fresh supply for an already under supplied market.

Now obviously as someone who makes money from the property market this is a good thing, price pressure will continue and so opportunities will continue to present themselves.

The Reserve Bank doubts its curbs on mortgage lending at high loan-to-value ratios will have a material counter-productive effect on house building.Builders have complained that the central banks moves to halve the amount of lending banks do at LVRs above 80 per cent have had a chilling effect on demand for new builds, undermining the widely acknowledged need to boost the supply side of the housing market.But governor Graeme Wheeler, releasing the banks six-monthly financial stability report yesterday, said: “We will keep monitoring the situation but it is a very small percentage of new lending and housing starts are growing strongly.”

via Loan restrictions wont slow building: Reserve Bank – Mortgages – NZ Herald News.