RBNZ Financial Stability Report: Easing cautiously off the brake – ANZ

Sandeep Kanihama FXStreet Contributor

Liz Kendall, Senior Economist at ANZ, points out that in its November 2018 Financial Stability Report, the RBNZ eased loan-to-value ratio restrictions modestly and the overall assessment is that New Zealand’s financial system is “sound” and “risks have abated a little over the past six months”.

Key Quotes

“The RBNZ assesses the New Zealand financial system to be sound. Domestically, risks related to the housing market have lessened: lending growth has slowed, fewer mortgages are on risky terms and house price inflation has slowed, especially in Auckland. With risks having abated a little, the RBNZ has eased loan-to-value ratio restrictions for both investors and owner-occupiers.”

“This is a modest loosening, in line with ANZ’s expectations. We anticipate that this easing will boost the housing market, but only a little, with the restrictions remaining “tight” overall.”

“We expect that further easing will occur in time, but that the RBNZ will continue to tread cautiously.”

“Although housing-related risks have reduced, dairy sector debt remains high and the industry is vulnerable to another downturn, while longer-term challenges loom large.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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