by Maria Scott
Bouris said he did not know whether the market in New Zealand was big enough to produce significant problems for lenders. But he said New Zealand’s property and credit markets would benefit from stabilisation. “Competition here is pretty heavy. There probably needs to be some stabilisation.”
“I get very concerned about loosening of credit criteria.
“The danger is that you are lending to people who can’t afford it.
You can create a sub-prime borrowers by lending more to people who really can’t afford it because you are chasing market share.”
Bouris said that announcements last week by Reserve Bank Governor Alan Bollard of plans to tighten the tax rules on property investments were unlikely to halt house price increases. The introduction of capital gains tax on investment property gains in Australia in 1985 had been absorbed by investors, he said. In the early 1990s the country experienced its biggest ever property boom.
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