Will Debt to Income Restrictions Become a Reality?

We have already discussed the pressure Debt to Income Ratios (DTI's) would put on first home buyers in Queenstown if implemented. ASB economist Nick Tuffley doesn't think we will see them in the next 12 to 18 months, but has raised the potential that we could see a version of DTI restrictions as a longer term prospect. He believes they would come with a range of exemptions and some degree of flexibility. In this sense they would compliment current LVR's in dealing with higher risk borrowing. He expects this would allow the Reserve Bank to keep interest rates lower, meaning the rest of the economy would be less affected by any measures taken to control the property market.