The Reserve Bank has told the Government to review immigration policy in a bid to stem rising house prices.
The call comes days after Prime Minister John Key told the central bank to ‘just get on with it’ and introduce immediate restrictions on rampant property investors as the average Auckland house value nears $1 million.
In a speech in Wellington yesterday Reserve Bank deputy governor Grant Spencer shot back at Key – warning that moderating housing demand was a ‘team effort’.
While the bank has signalled new measures to tackle the effect of investors and possible borrowing limits linked to people’s incomes – no firm deadline has been given other than saying they were possible before the end of the year.
But an economist said urgent measures were needed ‘overnight’ and the failure to act now would spark a new run on investment property by ‘uninformed – under-capitalised investors’.
In an unusually direct comment on immigration policy Spencer told the Government to review the number of people moving to New Zealand – as the impact of high net migration on housing could not be ignored.