Under these changes, lenders are required to apply stricter guidelines when assessing a borrower’s ability to repay their mortgage. Mortgage brokers have complained that these rules have contributed to a “credit crunch”, with 7% of mortgages that would previously have been approved are now being turned away. The consultation paper notes that some banks were applying the rules in a way that was “more onerous and restrictive” than had been intended. The Bankers’ Association is, therefore, calling for a more fulsome review of the CCFA. With New Zealand house prices falling more than 4% since November, and the RBNZ still considering prices to be “unsustainably high”, the Ardern Government will need to tread very carefully to ensure a soft landing.

Source: Stuff May 06, 2022 04:13 UTC