Missed opportunity to relax LVRs

The Government is missing an opportunity to fine tune the mortgage restrictions which are locking so many Kiwis out of the dream of homeownership, Labour’s Housing spokesperson Phil Twyford says.

“Reserve Bank deputy governor Grant Spencer said today the bank believes Loan to Value Ratios (LVRs) are achieving their purpose, and with interest rates going up, these mortgage restrictions could be lifted later this year.

“Now is the perfect time for the Government and the Reserve Bank to agree that LVRs should apply only to Auckland and Canterbury, which are responsible for 90 per cent of house price inflation.

“Why should regional New Zealand continue to be punished for the Government’s failure to fix the Auckland housing crisis and get the Canterbury rebuild happening?

“New Zealanders living in the regions are being hit with a double whammy. They have to meet LVR minimum deposit limits while mortgage interest rates are going up, adding thousands of dollars a year to their debt servicing.

“This is all because the Government refuses to crack down on Auckland property speculators and roll up its sleeves to build more houses.

“LVRs have been a shambles from start to finish with the Government not checking their impact on first home buyers until a month after signing off the restrictions. The Reserve Bank has also severely underestimated the effect on new builds.

“National refuses to take real steps to tackle the housing crisis like taxing speculators through a Capital Gains Tax or building large numbers of affordable houses.

“Only a Labour government will tax property speculators to take the heat out of the housing market and build 100,000 affordable homes through our Kiwi Build policy,” Phil Twyford says.

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