RBNZ published a detailed response to request from Finance Minister Grant Robertson regarding adding consideration of house prices into monetary policy. Governor Adrian Orr warned, “adding house prices to the monetary policy objective would be unique internationally, which could make monetary policy less effective and impact financial market efficiency.”
Instead, “if you wish to strengthen the Reserve Bank’s role in relation to house prices, our recommendation is that this would be best achieved by amending our financial policy remit.” “There are considerably less trade-offs between the Reserve Bank’s financial policy objective, of a sound and efficient financial system, and stable house prices,” Orr wrote. “It would also enable the Reserve Bank to use financial policies that can be specifically targeted at key drivers of the housing market.”
