Threat of LVR limits triggering ‘panic buying’

A group representing mortgage brokers has warned against “panic buying” ahead of the Reserve Bank’s proposed limits on high loan-to-value ratio (LVR) lending by banks.

The bank was recently given a range of new macro-prudential “tools” to enable it to cool off an over-heating property market without having to hike the official cash rate (OCR).

One of these tools is limiting the amount of lending banks can do above a certain LVR, a prospect that has created concern about the plight of first-home buyers, particularly in Auckland’s expensive market.

 

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