We have been commenting on this for a while and it appears that the banks are going to start to pass this on (although a number have not made comment or shown any price changes yet) the Reserve Bank is also conducting a further review to see if the Banks should hold even more capital on mortgage lending which could push interest rates up even further.
The last week has seen policy changes by ASB, ANZ, BNZ and Westpac targeted at offshore borrowers.
Last November the Reserve Bank increased the amount of capital Banks needed to hold when lending on investment properties which we comments on in a previous blog HERE. As per our comments
The market and in particular the Auckland market seems to be back in full swing. After a few months with lower overall sales numbers and auction clearance rates falling the last couple of months the last month or so has seen a complete reversal with Auckland hitting the highest ever median sale price according to REINZ in March and strong sales numbers appearing across the board.
2016 is already looking to be an interesting year in the NZ property markets with some questioning whether the Auckland market has finally peaked and whether it is now set for a major correction.
Following on from the above comments if you are in the Auckland region or surrounding areas and want to know more
This is going to continue to be an interesting but volatile discussion in 2016 with many indicators both at home and overseas suggesting that there could be more downward movement.
With the tightening of Bank rules bought on by the RBNZ changes as well as an increase in borrowers or situations who don’t quite fit into the standard bank space I thought it may be a relevant time to raise a few cases we have funded over the last month with non-bank lenders.
At 9am this morning the RBNZ cut the OCR to its lowest point ever (back where we were after the Christchurch earthquakes) however has signalled that it is likely to hold it there until the end of 2018.
It’s been a pretty crazy year working in an industry connected to the Auckland housing market and over the last 1-2 months things have definitely cooled down however it is worth having a closer look to see how things may play out moving forward:
What is bridging finance? It is temporary/short term finance required to ‘bridge’ a gap when a property has been purchased but is to settle prior to a sale of an existing property.
Keep an eye out over the next 6 months or so in regards to the above. The RBNZ’s main approach since introducing Macropudential policies in 2013 as a means outside of using interest rates to control the property markets has been around equity based or LVR controls.
The RBNZ has pushed the start date of the introduction to the 30% deposit requirement back from an original intro date of the 1st of October to it now being bought in on the 1st of November.
We'll get a more comprehensive blog out in the next few days but the Reserve Bank yesterday announced a new restriction specifically targeting investors and aimed at just the Auckland market.
The battle does not get easier for first home buyers needing 20% deposit. This is particularly pertinent to those in the Auckland market.
While there is still a lot of global volatility many things seem to be staying the same at the moment. The Auckland housing market is still going ballistic, with what seems ever increasing net migration, the council seems to be getting further and further behind in regards to issues consents to fix the supply side of the equation and the Bank war continues with rates that no one really expected to be this low this far into the cycle.
While Kris Pedersen Mortgages have used BNZ a number of times on an unofficial basis they have announced that they are formally coming back in to the broker market.
At KPM we have a number of clients who are regularly involved in Spec Build projects, from 1 to multiple houses at a time where the client does not wish to market the houses for sale until they are near completion, thereby maximising the end value / price paid given the purchasers can “touch and feel” the product.
From 1 April 2015 The KiwiSaver HomeStart grant will replace the KiwiSaver First Home deposit subsidy.
As most self-employed clients know seeking and securing business finance from the Bank – secured solely against the business assets or at higher levels than standard home lending ratios will allow – is never easy and is usually met by your banker asking the question “What property assets will you be using to secure the lending?”.
While many of us have enjoyed what weather wise has been a ripper of an NZ summer so far many are still spending their times checking out open homes as activity levels leading up to Christmas and the last couple of weeks have been exceptionally busy.
The Banks have increased their ‘qualifying’ or 'test' interest rate for assessing debt serviceability. As a result loans that would have
been secured earlier are now being rejected so preparation is key when applying for a mortgage.
Many of you may be aware that the Reserve Bank has been planning to introduce a new rule that would immediately impact on property investors with five or more properties with one Bank.
It is widely known that in October 2013 the Reserve Bank Governor (Graeme Wheeler) introduced restrictions on Banks mortgage lending over 80% of the LVR (loan to valuation ratio).