Fitch: New Zealand housing risk unlikely to rise on easing of curbs

The US-based ratings agency said in its latest report published on Wednesday, “the Reserve Bank of New Zealand's (RBNZ) plan to ease some of its macro-prudential measures in the mortgage market is unlikely to reverse the cooling of the housing market or meaningfully increase banks' exposure to housing risks.”

Key Points:

“The changes to restrictions on loan-to-value ratios (LVRs) are relatively minor and are likely to coincide with other housing policies proposed by the new government that should further reduce pressures in the market.

We do not expect a significant impact on the credit profile of Fitch-rated New Zealand banks.

Policies proposed by the new government could further moderate gains.

These include a ban on foreign purchases of existing residential property - limiting them to purchases of new property - and a more onerous tax regime for residential property investors.

We expect only modest house price increases in 2018, and the latest LVR changes do not affect that view.”