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The Reserve Bank of New Zealand says that it is putting in place more stringent LVR restrictions to reduce risks to financial stability caused by high-risk mortgage lending

More statements

  • LVR restrictions do not apply to new residential construction.
  • Says now concerned about the risk a sharp correction in the housing market poses for financial stability.
  • Says there is evidence of a speculative dynamic emerging with many buyers becoming highly leveraged.
  • Says as of 1 March the reserve bank will be reinstating LVR restrictions at the same level they were set at prior to the onset of covid-19.
  • Says further tightening of investors’ restrictions taking effect on 1 May.

The news has not impacted the forex space as this was well telegraphed in prior statements from the bank.