Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Key Wants RBNZ to Exempt First-Home Buyers From Lending Rules

Don't Miss Out —
Follow us on:

June 17 (Bloomberg) -- New Zealand Prime Minister John Key said he wants the country’s central bank to exempt first-home buyers from tighter mortgage lending criteria it is planning to implement.

“It strikes me that they’re the very people we’re trying to assist,” Key said at his regular weekly press conference in Wellington today. “So I don’t want to see tools implemented that lock them out of the market.”

With house prices surging in Auckland and Christchurch, New Zealand’s largest and third-largest cities, the Reserve Bank has said it may seek to restrain bank lending by imposing limits on the proportion of risky mortgages they can hold on their books. The proposal is to lower the number of loans made at more than 80 percent of a property’s value.

The RBNZ is reluctant to raise interest rates from a record-low 2.5 percent because inflation is running below its 2 percent target and it doesn’t want to fan gains in the New Zealand dollar.

Key said the aim of the new mortgage lending measures, which the Reserve Bank negotiated with the government, was to help rein in house-price inflation, not make it harder for poorer people to enter the market. He had made his views known to central bank governor Graeme Wheeler.

“I think they’re sympathetic to what I’m saying, but there are challenges,” Key said. “I understand that, but in the end I don’t think it’s as challenging as everybody says.”

To contact the reporter on this story: Matthew Brockett in Wellington at mbrockett1@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.