Orr has no regrets on scrapping LVR limits

RBNZ governor Adrian Orr said the central bank has "no regrets" on scrapping loan to value ratio restrictions, despite a U-turn to reimpose the limits.

The Reserve Bank today announced a consultation on reintroducing LVR rules, after scrapping them in May for one year. LVR limits could return in March, following a consultation period.

LVR rules are set to be reimposed amid significant growth in high LVR investor lending, the central bank said.

Orr, asked whether the decision to scrap LVR limits was a mistake, defended his decision earlier this year.

"We made sure during the darkest periods of the Covid uncertainty that there was nothing we were doing that would get in the way of banks being able to step up and provide confidence and cashflow." 

Orr was asked whether low interest rates were fuelling record house price growth. 

He said property market inflation was mainly a "supply issue", with factors including immigration drivers as well as interest rates. 

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