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The Reserve Bank’s revised loan-to-value restrictions have made it even harder for first-home buyers to get on the property ladder, says National’s Shadow Treasurer Andrew Bayly.
“LVRs are supposed to be a tool that reduces risks to financial stability – not to shift house prices at the expense of first home buyers.
“The underlying problem behind LVRs currently is that the Minister of Finance is influencing the Reserve Bank to give greater weight to house prices than it should, when the real solution to the house price problem is removing barriers to increasing housing supply.
“The Prime Minister promised to ‘tilt the playing field’ in favour of first-home buyers. But the most recent QV figures showing that house prices at the lower end of the market increased at a faster rate this winter than they have in five years suggests the Government is doing the exact opposite.
“The Minister has directed the Reserve Bank to factor in Government’s policy to support more sustainable house prices, while the Bank has previously argued that lenders are well-positioned to weather a house price correction.
“What is clear is that Reserve Bank is responding to direction from the Minister of Finance.
“But what isn’t clear is why tighter LVR restrictions are required, or if the benefits will outweigh the impact they will have on first-home buyers fast losing even a glimmer of hope of getting on the property ladder.
“Instead of interfering with the Reserve Bank, the Government should get on with the job of making it easier to build.”
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