Loan-to-value ratio restrictions could be removed in the near future, with hints coming from both Bill English and, more recently, departing Reserve Bank Governor Graeme Wheeler. This is big news for investors.
Bill English saying LVRs should go pre-election sounded like it could have been just talk, but hearing Graeme Wheeler wants them gone is much more positive.
"LVRs are not expected to be a permanent measure and the conditions for their removal would be: signs that financial stability risks have eased; and a degree of confidence that these risks won't worsen again when LVRs are removed," Wheeler said in a speech.
This is pretty exciting for investors – the 40% deposit requirement has been a major hurdle for many investors, so if that is reduced or removed we should see some bustle in the market almost immediately.