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The Reserve Bank of New Zealand has responded to the country's surging property market by re-imposing loan to value ratios, which determine the deposit home buyers have to come up with to take out a mortgage.

RBNZ deputy governor Geoff Bascand said there was "evidence of a speculative dynamic emerging with many buyers becoming highly leveraged." The central bank dropped LVRs last year at the height of the pandemic disruptions.

Under the ratios, which will apply from March 1, first home buyers must have 20% of the purchase price as a deposit and investors, 30%. Banks will be limited to no more than 20% of their lending to owner-occupiers with less than a 20% deposit.