Property Institute slams RBNZ 'u-turn'

Ashley Church

His comments follow today's Reserve Bank announcement that property investors will require a 40 per cent deposit to buy property anywhere in New Zealand from September 1.

Mr Church said the announcement was directionless and smacks of political expediency.

“This is essentially a u-turn. Two weeks ago we were told that these measures would be introduced ‘at the end of the year’. Now they’re suddenly sufficiently serious that they need to be introduced in 6 weeks’ time? What’s changed?”

“Could it be that last week’s serve from the Prime Minister has spurred the Reserve Bank into action?”

Mr Church said that ‘even a whiff’ of political consideration in the banks announcement undermined the entire basis of the Reserve Banks role which was to act as an ‘independent referee’ for monetary policy.

“If the Reserve Bank can now be politically influenced it calls into question the entire basis of its existence and the terms of the Reserve Bank Act”.

“There was a time when the Reserve Bank could be trusted to act above politics, in the best interests of the nation. If that’s no longer the case – perhaps the Government should consider withdrawing some of the powers it has given the Bank – or even reviewing the Act”.

Mr Church said today’s announcement would make little difference to house price inflation.

“Many investors will already have close to, or over, 40% equity and this will be little more than a slight speed bump”.

Mr Church repeated earlier calls for the introduction of decisive and broad ranging policies to address the housing crisis.

“One-off, incremental and politically motivated, announcements won’t cut it. We have a runaway market and a generation of kids who can’t, now, afford to get into a home of their own. We need a comprehensive set of smart measures that send a clear signal to private developers, redirect investor activity into the building of new houses, and give our young people a fighting chance to buy their first home."