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Speaker 1: The Reserve Bank is slightly loosening it's old LVR lending

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Speaker 1: restrictions for mortgages from December. It's going to kick in

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Speaker 1: December one. Banks will be allowed to lend twenty five

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Speaker 1: percent of their book to owner occupiers who have less

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Speaker 1: than twenty percent equity. At the moment, it's restricted to

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Speaker 1: just twenty percent of that lending. Roger Beaumont is the

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Speaker 1: chief executive of the New Zealand Banking Association and with us.

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Speaker 2: Hello, Roger, good evening, Heather, Good to be with you.

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Speaker 1: It's good to talk to you back. Does this make

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Speaker 1: sense to you?

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Speaker 2: Oh? Look, I think it's a really good move that

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Speaker 2: will just give particularly first home buyers actually a little

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Speaker 2: bit with low deposits, a little bit more flexibility in

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Speaker 2: the market and let banks have a little bit more

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Speaker 2: flexibility to lend to them.

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Speaker 1: Don't mind the flexibility. But the first home buyers is

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Speaker 1: doing pretty all right, aren't they. Yeah.

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Speaker 2: So the data that we have just released shows that

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Speaker 2: in the first half of the year, of all new

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Speaker 2: home loans that were taken out, a quarter of them

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Speaker 2: were first home buyers. And so what I think that

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Speaker 2: tells us, Heather, is that actually first home buyers are

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Speaker 2: being pretty smart here and taking advantage of what i'd

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Speaker 2: call the sweet spot of softer house prices combined with

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Speaker 2: declining interest rates. So it's a really good time. I mean,

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Speaker 2: if I was a first time buyer, this is not

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Speaker 2: financial advice, but as a first time buyer, I'd be

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Speaker 2: looking really hard at the market right now.

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Speaker 1: Yeah, totally. I see. Also, the data that you put

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Speaker 1: out shows the total number of new home loans was

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Speaker 1: up nearly six percent, and that's in the first half

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Speaker 1: of the year. What do you reckon's going on there?

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Speaker 1: Is that just people switching banks.

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Speaker 2: There's definitely some switching activity going on there. I think

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Speaker 2: it's very competitive for consumers in the home loan market,

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Speaker 2: and so there's a bit of switching going on, and

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Speaker 2: although prices are subdued, there is some movement happening.

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Speaker 1: I need to ask you about the dreaded triple CFA legislation.

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Speaker 1: So I've heard that the government is going to roll

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Speaker 1: on this and it is not going to pass the

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Speaker 1: retrospective law. What have you heard.

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Speaker 2: I haven't heard that at all, But we are waiting

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Speaker 2: on the Select Committee's report that will be coming back imminently.

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Speaker 2: As I understand it. So it's gone to the Finance

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Speaker 2: and Expenditure Select Committee for them to assess and we'll

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Speaker 2: be waiting on their outcome with their recommendation.

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Speaker 1: I mean, it's kind of hard for the government to

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Speaker 1: change the law retrospectively for just one bank, which is

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Speaker 1: A and Z.

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Speaker 2: Right, Well, it's also changing it for potential issues in

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Speaker 2: the future. I mean, this is really badly written law

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Speaker 2: that actually has left this and it's been so chipped

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Speaker 2: away out over the years to try and fix it

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Speaker 2: because it was such a dog's breakfast. Frankly, it's just

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Speaker 2: left this anomaly with this four year period where you know,

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Speaker 2: banks could be taken to task for a spelling mistake

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Speaker 2: and a loan document and that's just ridiculous.

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Speaker 1: Is it possible? Could the government consider changing I mean,

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Speaker 1: you guys have a point obviously that the law does

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Speaker 1: need to be changed. Could the government change the law

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Speaker 1: for the future, but not retrospectively so that A and

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Speaker 1: Z still has to deal with the thing that it

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Speaker 1: has to deal with.

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Speaker 2: Well, there is potentially retrospective issues that we're not even

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Speaker 2: aware of that could come to come to the surface,

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Speaker 2: and so it's a matter of dealing with it once

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Speaker 2: and for all to make the law. And you know,

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Speaker 2: all we're asking is is that the law is consistent

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Speaker 2: with the way the law is now. So it's just

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Speaker 2: this four year window that's an anomaly that needs to

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Speaker 2: be fixed. And as the law is today, you know,

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Speaker 2: it can be up to the courts to decide what

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Speaker 2: is a fair and just outcome for consumers.

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Speaker 1: Yeah, good to talk to you, Roger. Thank you very much.

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Speaker 1: Roger Boumont, chief executive of the New Zealand Banking Association.

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Speaker 2: For more from Heather Duplassy Allen Drive, listen live to

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