WELLINGTON, May 31 (Reuters) - The Reserve Bank of New Zealand said on Wednesday that house prices remain elevated relative to income and any resurgence would be a worry.
The central bank said it will soon release a consultation paper proposing the addition of restrictions on high debt to income loans into its macroprudential arsenal.
"While the LVR (loan-to-value ratio) restrictions have increased the banks' resilience to any fall in house prices, a significant share of housing loans are being made at high debt-to-income (DTI) ratios," RBNZ said in its half-yearly Financial Stability Report. "Such borrowers tend to be more vulnerable to any increase in interest rates or declines in income." (Reporting by Ana Nicolaci da Costa and Charlotte Greenfield)