The New Zealand Reserve Bank announced yesterday that investors buying properties in Auckland city will require a 30% deposit if a mortgage is wanted from a commercial bank (eg ANZ, Westpac etc). A 20% deposit was introduced last year nationwide.
This is scheduled to apply from October this year.
Background to this is very high price growth in Auckland and slow to stagnant price growth in most areas of the country.
Many see a bubble developing in the Auckland property market.
Many factors appear to be coming together to reinforce price growth.
High and continuing immigration, good economic times by world standards, a shortage of housing, low rates of new building, and a self reinforcing belief in more price rises to come.
This measure has been put in place to protect the commercial banks in case of a major fall in property values.
Part of the Reserve Banks mandate from the Government is the protection of the ?Banking System?.
Part B of this is a wide spread campaign by some political parties, media, and commentators to paint property investors in a bad light and responsible for much of societies ills.
This move could be seen as the independent Reserve Bank trying to slow price increases without the Government action that may not be popular with electors.
Interesting to see how this pans out in practice.
Australian Governments have adopted many ideas from New Zealand in the past.
GST, PAYG (PAYE in NZ).
Do you ever see the day Sydney for example could have a different set of mandated rules for lending from the rest of NSW?
This is scheduled to apply from October this year.
Background to this is very high price growth in Auckland and slow to stagnant price growth in most areas of the country.
Many see a bubble developing in the Auckland property market.
Many factors appear to be coming together to reinforce price growth.
High and continuing immigration, good economic times by world standards, a shortage of housing, low rates of new building, and a self reinforcing belief in more price rises to come.
This measure has been put in place to protect the commercial banks in case of a major fall in property values.
Part of the Reserve Banks mandate from the Government is the protection of the ?Banking System?.
Part B of this is a wide spread campaign by some political parties, media, and commentators to paint property investors in a bad light and responsible for much of societies ills.
This move could be seen as the independent Reserve Bank trying to slow price increases without the Government action that may not be popular with electors.
Interesting to see how this pans out in practice.
Australian Governments have adopted many ideas from New Zealand in the past.
GST, PAYG (PAYE in NZ).
Do you ever see the day Sydney for example could have a different set of mandated rules for lending from the rest of NSW?