Great News! – LVR Restrictions Eased For Investors And First Home Buyers!
This week the Reserve Bank of New Zealand eased the LVR restrictions, so Banks will be able to provide 20% of their owner-occupier loans to borrowers with a deposit of less than 20% while lenders will be able to allocate 5% of new investor loans to borrowers with less than a 30% deposit.
Adrian Orr says, “The longer that house prices grow slowly, the less likely it is that they will fall sharply in the future.”
This seems like a very sensible decision to avoid what has happened in Australia, especially in Sydney where the market has crashed.
Bindi Norwell of the REINZ said the ability for young people to get onto the property ladder has become increasingly difficult with median house prices across New Zealand rising 67.8 percent over the last ten years from $335,000 in October 2008 to $562,000 in October 2018.
In Auckland, the situation was worse with prices rising 98.9 percent in a decade, from a median $435,000 in October 2008 to $865,000 last month.
“It’s no wonder home ownership is at its lowest point in 60 years.”
Compared with when I left school in the 1980’s, and most people could afford to buy a home, housing has now become too expensive for the average NZ couple.
In action in the housing sector by the previous government has allowed this situation to happen. Eventually, Kiwi build will start to ease the supply issue but will take time. At present, 102 companies are tendering to build houses off-site to improve scale, quality and price of housing.
Have a great weekend everyone,