Economists are looking at ways the hot housing market could be cooled. Banks should be forced to hold more capital against investor mortgages pushing up the interest rate to help cool the property market, an economist believes. Jarrod Kerr, chief economist at Kiwibank, said the rampant run in the housing market had "surely taken a negative cash rate off the table." But a Government call to the Reserve Bank to take housing into account as part of its decision-making as well as a faster than expected recovering economy has made that less likely. Kerr said the next best step the Reserve Bank could take would be a reassessment and bank repricing of the risk associated with home loans.

Source: New Zealand Herald January 25, 2021 21:26 UTC