Dawn Chorus: RBNZ green lights loan crackdown focused on first home buyers

RBNZ confirms halving of high LVR mortgage share to slow market; First home buyers are first in line for the bank squeeze; First homers set to lose $5b or 25% of their bidding power

TLDR & TLDL: The Reserve Bank has pulled the trigger on its proposal from earlier this month to halve the percentage of mortgage lending at more than 80% of the value of a house. The change from November 1 (one month later than originally planned) effectively carves off a quarter or $4.6b worth of first home buyer bidding power over the next year.

The LVR tweaks means first home buyers will have even less bidding power in auctions and tenders than last year, leaving the way clearer for those who have already gained from rising equity in their homes and rentals. Photo: Lynn Grieveson/The Kaka

First home buyers will be most affected by the change, which is designed to slow a still-hot housing market, but which also locks out many of those trying to get on the ladder to win the capital gains largesse still to come. It is designed to effectively cement in high prices, rather than reduce them to affordable levels.

In the 12 months to the end of July, Reserve Bank figures show first home buye…

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