New Zealand says housing loan strictures a success
New Zealand's Reserve Bank says lending rules to tame housing market have been successful
Associated Press
2014-05-14 06:42 AM

WELLINGTON, New Zealand (AP) -- Six months after introducing unusual rules to try to tame a booming housing market, New Zealand's Reserve Bank says those measures have been a success.

Last October, the bank introduced rules that require most borrowers to stump up a 20 percent deposit in order to buy a house.

In a Wednesday report on the country's financial stability, the Reserve Bank said the measures have contributed to an 11 percent drop in home sales since the measures were introduced.

It also estimated annual price increases have been limited to 9 percent instead of an estimated 11.5 percent without the restrictions.

The Reserve Bank says homes are still overvalued when compared with historic averages and remain among the most expensive in the developed world when compared with incomes and rents.

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