Last week the Reserve Bank loosened its grip on bank
lending, making it a little easier for low deposit house buyers.
Acting Reserve Bank Governor, Grant Spencer, said, “LVR (Loan Value Ratio) policies have been
in place since 2013 to address financial stability risks arising from rapid
house price inflation and increasing household debt. These policies have helped
improve banking system resilience by substantially reducing the share of
high-LVR loans. Over the past six months, pressures in the housing market have
continued to moderate due to the tightening of LVR restrictions in October
2016, a more general firming of bank lending standards and an increase in
mortgage interest rates in early 2017...Housing market policies announced by
the Government are also expected to have a dampening effect on the housing
market."
