ANZ has joined ASB in hiking its LVR for property investors.
Property investors at both banks will now be required to stump up a 30 per cent deposit rather than the current 20 per cent in the the wake of the Reserve Bank of New Zealand’s announcement yesterday that it is considering the reintroduction of loan-to-value (LVR) restrictions in March 2021.
"It's in everyone's interests for residential property prices to be sustainable long term, and for home ownership to be accessible to as many Kiwis as possible," Ben Kelleher, ANZ NZ managing director of personal, told the NZ Herald.
"Today we've made the decision to increase the deposit required by property investors to 30 per cent, up from the current 20 per cent for new home lending applications from 7 December.
"As a responsible lender it's important for us to help customers make good borrowing decisions, and that customers have a level of borrowing they can comfortably pay back. Covid-19 has made the housing market and lending decisions more complex, and we believe that any steps we can take to increase balance and sustainability in the market is the right thing to do."
Yesterday, ASB CEO Vittoria Shortt issued a similar statement.
“ASB believes a balanced and sustainable housing market is in the best interests of all New Zealanders," she said. "While we appreciate the RBNZ taking the time to consult, this is about helping Kiwis build their financial futures during exceptionally challenging times so we are choosing to take this step now."
Shortt said the lending market has improved markedly since New Zealand went into its first lockdown. Covid-19 hasn’t impacted the property market as anticipated and ASB is now witnessing rapid growth in lending volumes, she said.
“The number of applications we’re receiving is at an all-time high, up 70 per cent on this time last year, and while the proportion of first home lending is up, we have observed since Covid-19 a rapid increase in lending for investors. If this increase in investor demand continues it could lead the country down a potentially unsustainable path."
Shortt said pre-approvals already in place are unaffected.
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