The Reserve Bank of New Zealand's (RBNZ) plan to loosen some of its macro-prudential measures in the mortgage market is unlikely to reverse the cooling of the housing market, according to the latest report from Fitch Ratings.

Fitch said the changes to restrictions on loan-to-value ratios (LVRs) are relatively minor, and are likely to coincide with other housing policies proposed by the new government that should further reduce pressures in the market.

Fitch also said it does not expect a significant impact on the credit profile of Fitch-rated New Zealand banks. “We expect only modest house price increases in 2018, and the latest LVR changes do not affect that view.”The easing of LVR restrictions was announced by the RBNZ on 29 November 2017 and will apply from January 2018.

As it stands, no more than 10% of a bank's new mortgage lending to owner-occupiers can be at LVRs of more than 80%.

This cap will be lifted to 15%. The 5% cap on a bank's new mortgage lending to residential property investors that can have LVRs of more than 60% will instead be applied to LVRs of more than 65%.