SR303 Effect of the loan-to-value limits on new housing (2019)

The Reserve Bank introduced a measure from 1 October 2013 requiring most housing mortgages to have at least a 20% deposit from the owner. The aim was to improve the stability of the financial system, because the Reserve Bank was concerned about the large volume of low deposit housing loans.

BRANZ was approached by builders concerned about the effect of the measure on new housing starts. It was agreed with the Reserve Bank that BRANZ would undertake surveys of builders and recent new home owners to ascertain the likely effect of the LVR measures on new starts. This report describes the results of these surveys.