About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, August 23rd, 7:07PM
Mortgage Rates Daily Commentary
Friday 23 August 2019  Add your comment
Top mortgage advisers named; HSBC moves rates

Find out who won mortgage awards at the Financial Advice New Zealand conference here.

HSBC has cut fixed rates again. It has taken market leading positions in the 18-month and three year terms, plus it has taken 55 basis points off its floating rate.

Here's what it's one-year rate stacks up. [Click here]

rss
Latest Headlines

DTIs should be in RBNZ toolkit - IMF

Debt-to-income ratios (DTIs) and the redirection of tax incentives away from housing would help tackle the risks posed by New Zealand’s housing market, the IMF says.

Tuesday, March 7th 2017, 2:30PM

by Miriam Bell

The IMF has just released its preliminary report on its most recent New Zealand mission and it recommends a number of hard line measures directed at reigning in property investment.

Chief among these is the introduction of DTIs into the Reserve Bank’s macro-prudential toolkit to further enhance the resilience of New Zealand’s financial sector.

According to the IMF, housing-related macro-financial vulnerabilities are expected to increase in the near term – although they will potential stabilise at a high level in the medium term.

This is due to the demand-supply imbalance in the housing market, especially in Auckland, which has led to a house price boom and overvaluation, along with high levels of household debt.

“The authorities have taken steps to enable more housing supply,” the report said.

“Even with these measures (which could be broadened), the resolution of demand-supply imbalances will take time, and vulnerabilities should be contained with macro-prudential policies in the meantime.”

LVRs do not protect banks against an increase in the number of households defaulting and the probability of households doing so has increased with the rising DTIs on new loans.

To address this risk, the IMF recommends the inclusion of a DTI instrument in the Reserve Bank’s arsenal to directly target the most acute household vulnerability.

“The new instrument should be activated in the event that effects of the most recent macro-prudential package on credit growth prove to be temporary.”

The Reserve Bank is keen to introduce DTIs to its toolkit, but the government appears less enthusiastic and has ordered a cost benefit analysis first.

On top of DTIs, bank balance sheet resilience should be strengthened further through increases in bank capital requirements, the report said.

However, this will be explored in the course of the Reserve Bank’s review of banks’ capital requirements – which was announced today.

Another key point in the report is the need to ease housing supply constraints to safeguard the long-term attractiveness of New Zealand for skilled labour and business.

One policy the IMF recommends is the comprehensive reform of urban planning legislation and measures to support local infrastructure financing.

This would complement measures like the Auckland Unitary Plan and the Housing Infrastructure Fund and could also involve some central government funding, more efficient property taxation, and user charges.

Another growth support recommendation in the report is the redirection of saving incentives from housing to other investments.

“A broader capital gains tax on real estate would lower the incentives for investment in housing. Limiting negative gearing for rental properties would work in a similar direction.”

Overall, the IMF’s mission found that New Zealand is enjoying a strong economic expansion driven by record high net migration, strong construction activity, and accommodative monetary policy.

But policy challenges lie in managing the pressures of strong growth on infrastructure and on housing, particularly in Auckland, the report said.

Last time the IMF visited (in 2015) the mission found that Auckland’s housing market was one of the key risks to New Zealand’s economy and needed to be closely managed.

Read more:

DTIs cost benefit analysis ordered 

Accelerate housing, infrastructure – IMF 

Tags: banks DTIs Macro Prudential Tools RBNZ Reserve Bank

« Interest rate risk equally balanced: RBNZ Auckland affordability a credit negative - Moodys »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.19 4.25 4.49
ANZ Special - 3.69 3.75 3.99
ASB Bank 5.20 4.25 4.19 4.39
ASB Bank Special - 3.75 3.69 3.89
BNZ - Classic - 3.69 3.75 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 4.29 4.29 4.49
HSBC Premier ▼5.79 ▼3.65 ▼3.69 ▼3.85
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.40 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.65 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.78 3.78 3.99
Sovereign 5.30 4.35 4.29 4.55
Sovereign Special - 3.85 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.79 3.84 3.99
The Co-operative Bank - Standard 5.15 4.29 4.34 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.69 4.79 5.19
Westpac - Offset 5.34 - - -
Westpac Special - 3.69 3.75 3.99
Median 5.50 4.29 4.25 4.19

Last updated: 23 August 2019 8:51am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com