Government inquiry into new lending restrictions to report back in mid-February
The results of the investigation into the effects of the new CCCFA regulations in New Zealand is expected to be published in the coming fortnight amid public outcry over the impact of the new rules on the housing market.
David Clark, commerce and consumer affairs minister, ordered the investigation and published the terms of reference on January 31, with first findings expected to be released in mid-February.
Many advisors and others in the real estate industry have been highly critical of the new rules, which have made life far more difficult for borrowers to get home loans.
As a result, the numbers of first home buyers entering the market have fallen precipitously: yesterday, it was announced that just under 5,000 people were been able to access the KiwiSaver subsidy in December, over 1,200 down on the equivalent period the year before.
Mainstream media outlets have been carrying stories of the lengths that borrowers have had to go to in order for a bank to be allowed to accept their loan application, with one prospective homeowner subsisting only on white bread to satisfy spending limits.
Read more: Auckland property prices likely to fall in near future
The investigation is set to cover the whole scope of the CCCFA law, and will be led by the Ministry of Business, Innovation and Employment (MBIE), assisted by the Council of Financial Regulators (CoFR).
“The objective of the investigation is to identify any impacts of the recent CCCFA changes that came into force on December 01, 2021, considering the scale and nature of the impacts, to assess what, if any, further actions are needed,” read the statement.
“MBIE, as the relevant policy agency, will lead the investigation, including engagement with stakeholders, in collaboration with CoFR agencies.
“CoFR agencies will provide input to the investigation as well as review and feedback on the conclusions and recommendations of the draft and final reports in accordance with their relevant functions.”
