1 April 2021
Adam Irish
Email: [FYI request #14874 email]
Dear Adam
Thank you for your request of 8 March 2021 under the Official Information Act 1982 (OIA). You
requested the following:
“all advice to the Minister of Finance since 16 March 2020 relating to the impacts
of monetary policy and LVRs on first home buyers.”
Response
The Reserve Bank of New Zealand is New Zealand’s central bank. Its statutory mandate
includes:
Promoting the maintenance of a sound and efficient financial system
Maintaining price stability and supporting maximum sustainable employment.
The Reserve Bank uses financial policy to promote the maintenance of a sound and efficient
financial system, one of the tools it can employ towards this end is to place restrictions on high
‘loan-to-value ratio’ (LVR) lending. The Reserve Bank uses monetary policy to maintain price
stability and support maximum sustainable employment.
On 24 November 2020 the Minister of Finance wrote to the Governor of the Reserve Bank,
requesting his views on ways the Government and Reserve Bank could work together to
address the issue of rising house prices.
The Reserve Bank’s detailed response to the above letter was provided to the Minister on 9
December and subsequently published on the Reserve Bank website, you can access it here:
https://www.rbnz.govt.nz/news/2020/12/reserve-banks-response-to-minister-of-finance.
While this response does not specifically reference first-home buyers, it does include advice
on the relationship between both monetary and financial policy and house prices.
The Reserve Bank issued the following Regulatory Impact Assessments regarding the
removal and reinstatement of LVR restrictions:
Regulatory Impact Assessment: Removal of Loan-to-Value Restrictions following the
onset of COVID-19:
https://www.rbnz.govt.nz/news/2020/04/reserve-bank-removes-
lvr-restrictions-for-12-months.
Regulatory Impact Assessment: Reinstating Loan-to-Value Ratio Restrictions:
https://www.rbnz.govt.nz/news/2021/02/financial-stability-strengthened-by-firmer-lvr-
restrictions.
While these do not constitute advice to the Minister, they do include considerations of the
impact on first-home buyers and may therefore prove of interest.
2 The Terrace, PO Box 2498, Wellington 6140, New Zealand
Telephone 64 4 472 2029 Online at
www.rbnz.govt.nz
Ref #3299666 v1.1
2
Finally, we understand that the Treasury will soon be publishing information relevant to your
request,
which
you
will
be
able
to
access
here:
https://www.treasury.govt.nz/publications/other-official-information/information-releases.
The Official Information Act allows charges to be imposed for the preparation of information in
response to requests. The Reserve Bank is resourced to meet disclosure obligations for a
reasonable level of requests and the cost of providing free responses to Official Information
requests is generally borne by taxpayers. However, the Reserve Bank believes that requesters
should bear some of the costs, where allowable under the OIA, when requests are made for
large amounts of information, where a response is particularly complex, or where individuals
or organisations make frequent requests. In this instance, no charge is allowable under the
OIA as no new information is being released.
Please note that we intend to publish a copy of this response (with personal information
removed)
on
the
Reserve
Bank’s
website
www.rbnz.govt.nz/research-and-
publications/official-information-requests. Responses to requests are published in order to
improve public transparency and provide an additional resource for anyone seeking
information.
Yours sincerely
Tobias Vandenberg
Ministerial and OIA Adviser
Reserve Bank of New Zealand | Te Pūtea Matua
