Thanks for the replies. Ill try to address them as best I can.

Im not attempting to gain personally from this in any monetary way. Mounting a legal challenge would not require much capital a few thousand at the most I guess which I can fund myself. What would potentially require funds is obtaining expert testimony but I would really hope that interested free market economists would contribute their time pro bono or a reimbursement to cover their out of pocket expenses.

There would be no direct monetary benefit that I can see for those contributing. This would be a project community funded by likeminded individuals similar to kickstarter. Ive reached out to the bitcoin community as I believe a large number of users/followers have similar views to mine. If the challenge is successful it would have potentially far reaching consequences like for Australia for instance. The Reserve Bank of Australia (RBA) is similar to the RBNZ in that it has very autocratic views, distrust of free markets, does not believe in freedom and believes people need to be "protected" from themselves.

Not that it really matters but the LVR rules are extremely unpopular and have effectively shut out low income first home buyers from the entire housing market. The fundamental problem is that that RBNZ does not believe there are not enough houses; they think there are too many people and therefore instead of policies to support capital flow to the housing market they prefer to try to suppress demand by trying to increase prices of homes and price people out of the market.

My guess is that no one supports the LVR rules especially including first home buyers and investors who have been priced out of the market and sellers who have less buyers competing.

The more important point is that the RBNZ has entirely misdiagnosed the problem and come up with a remedy that has made things worse. Nowadays you would be very hard pressed to find any economists who think price controls work. Unless you spoke to those at the RBNZ. The broader issue or protecting the financial system itself is also very wrong imo. The only thing that can protect the system is competition not complex rules and regulations.

My preference is that the entire macro prudential rules are repealed entirely and the RBNZ goes back to simply being responsible for stable prices. This policy has worked very well for decades and insulated NZ to a great extent from the GFC. However that is not going to happen so the next best thing would be to challenge their basis on intervening in the market in the first place.

This is a very serious problem in this country. For those not aware we have the highest rate of homelessness in the developed world. For a country with a landmass similar to Japan and the UK but with a population of only 4m no less. Auckland is the world's fourth least affordable city in the world, now tailing only Hong Kong, Sydney and Vancouver as the least accessible housing market.