12 May 2015
RBNZ: Announcement of additional macroprudential measures? - RBS
FXStreet (Bali) - An announcement of additional measures could come as soon as the Financial Stability Report (FSR), released tonight, notes RBS.
Key Quotes
"Home prices and investment in the housing market in New Zealand have shown increased vigour since the fourth quarter of last year despite the addition of macroprudential policies in late-2013, and an announcement of additional measures could come as soon as the Financial Stability Report (FSR), released tonight."
"In particular, there is a risk that the Bank takes action on loans taken out for property investment or speculation. LVR restrictions introduced in late-2013 have done little to quell investor demand for homes in NZ, which has picked up noticeably. The Bank recently went through an exercise designed to define what exactly would constitute an investment property in order to define it as a separate asset class."
"The consultation period on this new definition ran through April 17th, making it possible that the RBNZ is prepared to expand measures designed specifically at this space. Indeed, RBNZ Deputy Governor Spencer discusses this proposal in an April 15th speech, where he notes that "A well-defined asset class would also facilitate the introduction of macro-prudential policy and the Bank is currently reviewing some options." On the margin, we think an introduction of new macroprudential policies may provide additional scope for rate cuts from the RBNZ."
Key Quotes
"Home prices and investment in the housing market in New Zealand have shown increased vigour since the fourth quarter of last year despite the addition of macroprudential policies in late-2013, and an announcement of additional measures could come as soon as the Financial Stability Report (FSR), released tonight."
"In particular, there is a risk that the Bank takes action on loans taken out for property investment or speculation. LVR restrictions introduced in late-2013 have done little to quell investor demand for homes in NZ, which has picked up noticeably. The Bank recently went through an exercise designed to define what exactly would constitute an investment property in order to define it as a separate asset class."
"The consultation period on this new definition ran through April 17th, making it possible that the RBNZ is prepared to expand measures designed specifically at this space. Indeed, RBNZ Deputy Governor Spencer discusses this proposal in an April 15th speech, where he notes that "A well-defined asset class would also facilitate the introduction of macro-prudential policy and the Bank is currently reviewing some options." On the margin, we think an introduction of new macroprudential policies may provide additional scope for rate cuts from the RBNZ."