Proposed policy changes announced by the Reserve Bank of New Zealand this morning are aimed at the growing housing market risk in Auckland.
Key points from the policy that’ll come into effect from 1 October are:
- Residential property investors using bank loans in the Auckland Council area will be required to have a deposit of at least 30 percent,
- and the existing speed limit for borrowing outside of Auckland will increase from 10 to 15 percent, to reflect the more subdued housing market conditions outside of Auckland.
The existing 10 percent speed limit for loans to owner-occupiers in Auckland at LVRs of greater than 80 percent will remain, as will the existing policy of LVR restrictions not applying to loans to construct new houses or apartments.
The Reserve Bank Governor, Graeme Wheeler, says the objective of the proposed changes are to reduce the rate of increase in Auckland house prices and moderate housing demand, while still allowing for new construction activity.
Interesting news that will be of particular interest to Auckland property investors. Thoughts?