- The Reserve Bank of NZ revised rules that exempt construction loans from the Loan-to-Value Ratio (LVR) ‘speed limit’ introduced last October
- The construction loan exemption means that low-deposit lending is not included in a lender’s 10 percent speed limit if the lending is used to finance the construction of a new house or apartment.
The LVR speed limit aims to reduce the threat to financial stability created by rapid growth in house prices. The exemption aims to support the supply of new housing and, in doing so, reduce some of the pressure arising from excess demand in the New Zealand housing market.
