WELLINGTON: The amount of low deposit high value mortgage lending in New Zealand fell further in November as recently imposed restrictions on banks started to bite, the central bank said on Monday.
The Reserve Bank of New Zealand (RBNZ) said the amount of bank lending to customers with less than a 20 percent deposit for a house (LVR loans) was 5.8 percent in November from 11.7 percent of bank lending in October.
Banks are required to keep such lending to no more than 10 percent of their total lending by March next year, which will allow them to manage loans approved before the rules came into force.
The limits have been imposed to help cool the housing market, where prices are at record levels.
Recent housing market reports have shown no slowdown in prices in the two biggest cities, Auckland and Christchurch, where there is a shortage of houses, although there have been reports of fewer houses being put on the market.
Earlier this month the RBNZ said loans to borrowers building new homes would be exempted from the rules after construction industry orders had fallen away because of the restrictions.
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