PHOTO: Ashley Church and Cameron Bagrie on the state of the housing market and the economy. Credits: The AM Show
Reintroducing loan-to-value (LVR) limits this year is “ultimate stupidity” because it won’t make any difference to house price inflation, a property expert claims.
That contradicts predictions from other experts who say the reintroduction of LVRs – the size of a loan in comparison to the value of a property – will start to slow the property market.
Data from realestate.co.nz released on Tuesday shows asking prices continue to skyrocket throughout the country.
“Ten years’ worth of data shows, in the long term, the value of property in New Zealand increases steadily in nearly every region,” it said in a statement.
“This suggests that property is still a sound investment for Kiwis.”
Contrary to forecasts that property prices would fall due to the COVID-19 pandemic and an economic recession, house prices climbed to record highs as interest rates plummeted.
But Quotable Value (QV) has said something that will mitigate that in 2021 is the reintroduction of LVR limits. The Reserve Bank (RBNZ) confirmed in November that it would reintroduce them from March.
“When the LVRs do eventually kick back in just as the weather begins to cool in March, I expect the property market will start to cool as well,” QV general manager David Nagel said late last month.
Property expert Ashley Church disagrees.
“They’ll make absolutely no difference to house price inflation, and will dash the dreams of a section of first-home buyers again – it’s sort of an exercise of the ultimate stupidity,” he told The AM Show.
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