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The Shift Aotearoa On LVR Loosening

Last week the Reserve Bank removed the LVR restrictions for an initial 12 month period. The reasons were three-fold: to utilise the counter-cyclical nature of the LVR restrictions (ie, to stimulate the economy), to avoid confusion for banks extending lending to customers impacted by COVID-19 in regard to LVR limits, and as a means for the Reserve Bank itself to respond to COVID-19.

The restrictions increased costs for some developers and community housing providers so for some this will be a welcome change. It is also a positive signal for families who may access more and better support from their banks at this time.

A submission by The Shift Aotearoa identified potential risks associated with the change related to the absence of other limitations on lending, and the inability to ensure additional lending is reserved for or reaches families in need. Read the submission here.

Thoughts or queries on it? CHA welcomes your engagement on this submission by The Shift Aotearoa - please contact me here.

-- By Brennan Rigby, Project Lead for the Shift Aotearoa

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