New Zealand Prime Minister Jacinda Ardern (Image: AAP/Daniel Hicks)

While the debate about house prices is stuck in a holding pattern in Australia (with governments too scared to do anything too radical for fear of upsetting homeowners, and regulators averse to dealing with a problem that's political in origin), the Kiwis just get on with it.

In a statement from the Reserve Bank of New Zealand (RBNZ) yesterday, the Kiwi central bank added debt-to-income levels (DTI) to its macro-prudential "toolkit" with the agreement of the minister of finance.

DTI levels are the ratio of a borrower’s total debt compared to their total income. Placing a limit on DTI levels can prevent borrowers from taking on debt beyond what they're able to repay -- rather than just leaving it to the judgment of the lending institution, like we do here.