Former Reserve Bank Governor Don Brash believes it would be irresponsible to relax lending rules which were brought in to help cool the housing market.

The number of house sales has dropped by almost a quarter in the past year, thanks largely to the Bank's loan-to-value (LVR) rules.
Real Estate Institute Housing sales are now down 24.5% across the country.

That has prompted calls for an easing of the restrictions, but Dr Brash said a slower market is not enough to make things easier for first home buyers.

He says changing LVRs now would only push people into debt they cannot afford and that the market is still too elevated for a lot of first home buyers. He said we can expect the Reserve Bank to keep LVRs where they are for some time. He said while the Reserve Bank will be happy to see a slow down in the housing market, they are not likely to rush into any changes.