The Opposition says it is clear the Reserve Bank wants the government to do more

Opposition parties are calling on the Government to step in and help stem the booming housing market after the Reserve Bank signalled the need to review New Zealand’s immigration policy.

Just days after the prime minister told the Federal Reserve to “just get down to business” if it wants to deal with rampant real estate investors, Lieutenant Governor Grant Spencer appeared to criticize John Key, saying a “team effort” is needed. .

Spencer said in a speech yesterday that the central bank is considering increasing restrictions on investor borrowing and may tighten loan-to-value ratios by the end of the year.

He warned that a sharp fall in house prices could pose a “real risk” to the economy and confirmed that the bank was also considering using debt-to-income restrictions to “limit the speed” of mortgage lending.

“The risks associated with the real estate market require a broad policy response… It is also important to consider actions that will make real estate demand more in line with supply,” he said.

“Two areas for ongoing consideration are tax and migration policy.”

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Spencer said high immigration rates had boosted demand and a review may be warranted.

“Like taxing investor-owned housing, immigration policy is a complex and controversial issue,” the lieutenant governor said.

“However, we cannot ignore the fact that the 160,000 net influx of permanent and long-term migrants over the last three years has resulted in unprecedented population growth and a significant increase in demand for housing.”

Labour’s finance spokesman, Grant Robertson, interpreted it as an appeal to the government.

“In the bank’s diplomatic terms, this is a warning to the government, which is not doing anything concrete,” he said.

“With house prices skyrocketing day by day, the government needs to address both supply and demand and take control of the situation.”

Greens finance spokeswoman Julie Anne Genter says Spencer’s comments show the bank thinks the government could be doing much more than it actually is.

“When the Reserve Bank says a broad policy response is needed, it is quite clear that it wants the government to do more to help,” she said.

“Tax benefits for real estate speculators have unbalanced our economy.”

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BNZ Chief Economist Tony Alexander said he told NZME urgent action is needed, adding that the bank should have introduced even tighter limits overnight.

“I think in three or four years they’ll come to the realization that maybe they should have brought the hammer down a lot sooner before a whole bunch of unwitting, undercapitalized investors came into the market.”

It calls on banks to demand 50% deposits from Auckland investors and 30% from other buyers.

-From NZN