Parker: Limit LVR restrictions

He will announce his party’s proposals for changes to the Reserve Bank Act tomorrow.

Parker told The Nation at the weekend Labour would give the Reserve Bank “one new tool” in its policy targets agreement and it would change the way it applied its existing tools.

He said loan-to-value limits were not working and Labour would restrict them to the biggest city.

“I mean it’s ridiculous that places that have got no or low house price inflation are caught up in the same rules are Auckland and Christchurch. Loan-to-valuation ratios, if they are necessary, certainly not necessary for example where I come from in Dunedin. We haven’t got house price inflation there so why should our economy be hobbled? Why should our young people be prevented from buying houses because of the blunt way in which loan to valuation ratios are being applied.”

Commentator Olly Newland said the stance raised some questions.

“If LVR loan limits should only apply to Auckland, where does Auckland start and where does it end? Who is going to draw the thick blue line around Auckland which says this side of the street will have LVR controls while the other side does not? You can just see it can’t you? Masses of people, with little, children in tow, who haven’t got enough deposit to buy a house, pushing their couches, beds, prams, bicycles, blankets and fridges across whole suburbs to get over that illusive blue line to where their smaller deposits can buy a home so as to finally stop wasting money on rent.”

Parker said Labour would also introduce a capital gains tax, build more affordable housing and ban foreign purchasing. “And you need to address monetary policy so that you are not jacking up interet rates when they’re already the highest, higher than Australia, the US, China and Europe.”