Reserve Bank finalising more measures to cool housing market

PHOTO: RBNZ Governor Adrian Orr says interest rates around the world were likely to rise to counter rising inflation pressures. Photo: RNZ / Dom Thomas

The Reserve Bank is preparing more tools to cool the housing market as it continues to warn about unsustainable prices and the risk from a slide in the market and higher interest rates.

Housing crisis: All eyes on housing market ahead of Reserve Bank’s next report

The central bank’s six-monthly financial stability report said the financial system is solid and able to support the economy through the current Covid-19 related uncertainty and recovery.

But RBNZ Governor Adrian Orr has repeated long standing concerns about risky lending and the hot housing market.

“Strong demand for housing has pushed house prices above their sustainable level, increasing the chance of a correction. Recent buyers are borrowing more relative to their income, and may be vulnerable to higher mortgage rates or a fall in house prices.”