The central bank recently introduced loan-to-value ratios, which will restrict retail banks in their mortgage lending. While some borrowers will be able to obtain mortgages with only a small deposit, many - including first-home buyers - will need to find a 20% deposit if they are to buy into New Zealand's rapidly escalating housing market.
To say it is a New Zealand problem is not strictly true. The main problem is restricted to Auckland and Christchurch, where house prices have been rising rapidly because of the disparity between supply and demand.
The LVRs basically limit the amount of residential mortgage or home lending a bank can do: new lending on property purchases with a LVR greater than 80% is limited to no more than 10% of the dollar value of the bank's new residential mortgage lending. It is not an entire prohibition of lending on residential properties with a LVR of 80% or higher, but a restriction. In essence, the tap has been turned down, not off.
Calls have come from this region, in particular, for the Reserve Bank to introduce regional exceptions to its LVR rules, but Mr Wheeler ruled that out as too hard to administer and as having the possibility of shifting pressures to outside wherever the boundary is drawn. Labour Party finance spokesman David Parker, however, believes the issue is not as complex as the central bank makes out.
Regional centres like Oamaru and Balclutha are sure to be hit with LVR rules when there is no housing price pressure or inflation in those centres. South of the Waitaki River, apart from perhaps Queenstown, prices for houses remain in reach for most first-home buyers and others wanting to enter the property market.
The Government is now rushing out housing announcements, including letting people buy state houses which are surplus to requirements. Those state houses are spread from Otorohanga to Invercargill.
It seems, again, that regional New Zealand is paying for the problems of Auckland and Christchurch.
While there is sympathy for the plight Cantabrians find themselves in following the devastating earthquakes, little has been done by the Government in recognising the damage its housing policies - aimed at fixing problems in Auckland and Canterbury - could do to the rest of the country.
As the fight continues to stop AgResearch from removing nearly 90 highly-skilled jobs from Invermay, Economic Development Minister Steven Joyce announced the Government intends spending $530,000 to support the 2014 and 2015 Art Deco weekends in Hawkes Bay. A few days previously, Napier MP and cabinet minister Chris Tremain announced he will retire from politics at the next election.
Mr Tremain won Napier in 2008, the first time National had held the seat in about 50 years. In the United States, the term pork barrel politics is common. It implies money being poured into projects by governments wanting to retain an electoral advantage.
The Government has for a while now faced accusations it governs for just a few, but with the majority having to pay the price. Funding an Art Deco festival in Napier may be a worthy cause, but so is providing equity in housing and government services in regions such as Otago.
National's southern MPs will face tough questions in next year's election campaign if the Government's campaign of neglect continues south of the Waitaki. They will be rightly asked what they have done to invigorate the South. We are not looking for handouts, but the answer is not enough.
The South may not have the votes the Government craves, but it does have a disproportionate share of the country's exports. It is time for a more considered look at how policies are affecting New Zealand's regions.
