The Reserve Bank of New Zealand (RBNZ) Governor, Adrian Orr, signaled this week that the central bank may soon be looking at the prospect of re-introducing Loan to Value ratio (LVR) limits in New New Zealand. This is a reversal to the decision back in May when the central bank removed the limits on high loan to value ratio that had been in place since 2013. The removal of the LVRs were an attempt to keep spending high in very uncertain, COVID times....
There is a lot happening in New Zealand’s economy currently. New Zealand is officially in a recession with new GDP figures that came out yesterday, a monetary policy update is due next week and an election is taking place mid next month. Thursday’s numbers from Statistics New Zealand represented a -12.2% reduction in GDP for the June 2020 quarter - the largest quarterly fall in GDP on record. Which, unlike the previous quarter’s figures only captured a week or two of New Zealand’s nationwide 4-week lock down, June 2020 figures captures the lion’s share of the lock down....