RBNZ announces changed to the proposed LVR

FXStreet (Mumbai) - On Friday the Reserve Bank of New Zealand (RBNZ) announced changes to its proposed Loan-to-Value Ratio (LVR) rules, which were due to take effect in October.

The new rules are aimed at stemming investor activity in Auckland's booming housing market, where house prices are rising on average more than 20% y/y.

The LVR changes, which were announced in May, mean investors in Auckland must front up at least a 30% deposit to buy a rental.

Changes to the new policy include a start date of November, one month later than initially proposed, and a larger 'speed limit' for bank loans which exceed the 70% LVR, upped from 2% to 5%.

The RBNZ also said it would make exemptions for 'leaky' homes and other similarly affected homes.

RBNZ Deputy Governor Grant Spencer is due to make a speech on the property market on Monday 24 August.