From Nine To Noon, 9:09 am today
The chances of a crash in house prices are not high, but some controls on lending are needed, according to new Reserve
Bank Governor Adrian Orr.
Mr Orr began as the central bank's new governor last month after ten years heading the New Zealand Superfund.
Photo: supplied
Speaking to Nine to Noon's Kathryn Ryan, he talked about changes at the bank, the risks on the horizon for New Zealand and where interest rates
might go.
Click a link to play audio (or right-click to download) in either
He said the reasons for the stretched housing market were clear, including strong immigration and lack of supply.
He said loan-to-value-ratio lending restrictions were likely to be a permanent feature of the market, although the
levels would vary.
However, Mr Orr said lending banks had to play their part in keeping the market under control.
"Banks need to far more responsibility around are they lending to people who are able to afford through a sustainable
basis through time."
Mr Orr said householders and investors also needed to consider whether they were putting all their financial eggs into
one basket when it came to the housing market.