Stricter loan rules for Auckland property

Wellington

NEW Zealand's central bank plans to tighten lending restrictions for residential property investors in Auckland to curb an overheated housing market in the nation's largest city.

Investors will need to have a deposit of at least 30 per cent for any bank loan to buy residential property in the Auckland area, the Reserve Bank of New Zealand (RBNZ) said in its semi-annual Financial Stability Report in Wellington on Wednesday. The proposed new policy would come into force from Oct 1.

Governor Graeme Wheeler is using lending limits to curb the housing market in Auckland, home to a third of New Zealand's 4.5 million people, after last month ruling out increasing the official cash rate as inflation slows to near zero. The new loan restrictions add to signs the central bank may cut borrowing costs later this year, economist…