Higher interest rates not the right answer for housing bubble, RBNZ’s Spencer says

Wed, 26 Jun 2013

By Paul McBeth June 27 (BusinessDesk) - The Reserve Bank says raising interest rates now isn’t the right policy response to an overheated housing market and the bank considers restricting low equity home loans as offering the “greatest potential” to curb demand. Deputy governor Grant Spencer told the Business NZ Council in Wellington that the “overheated housing market is a real threat to future financial stability” and while a shortage of supply was the root cause, low interest rates spurring demand was underpinning the “rapid escalation i...

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