INDEPENDENT NEWS

LVR review well overdue for Akld first-home buyers

Published: Tue 21 May 2019 04:03 PM
“For the sake of tens of thousands of potential first-home buyers in Auckland, it’s time for the Reserve Bank to formally review its six-year-old policy on loan-to-value ratios (LVRs),” says Ryan Mitchell, National Manager of Century 21 New Zealand.
The real estate boss’s call follows recent industry data which confirms Auckland’s slowdown both in the number of sales and prices reached. It also follows the Reserve Bank cutting the Official Cash Rate to a record low, with many banks now offering once-in-a-lifetime interest rates.
“The blanket high deposit requirements are sadly and simply keeping too many first-home buyers out of the housing market. It’s actually cruel that so many are denied the opportunity of home ownership during a time of record low interest rates and steadying prices because of this outdated and unnecessary measure,” says Mr Mitchell.
“I appreciate the Reserve Bank is committed to an ongoing appraisal of the situation. However, the time for a formal and specific review has arrived. It’s abundantly clear that the tough LVRs are no longer needed. In fact, in Auckland they’re now counter-productive!”
The stringent LVR policy was introduced as a ‘temporary’ measure back in 2013 to help manage what was a crazy Auckland property market, with new home builds exempt from the lending restrictions. Six years on and it’s generally agreed that the LVR policy has had its desired effect.
“There has been some tweaking at the edges but much more now needs to be done. It’s time the policy reflected the 2019 market, not the 2013 one.”
Since 1 January banks have been allowed to lend 20% (increased from 15%) of their new loans to owner-occupiers with a deposit of less than 20%.
Mr Mitchell says the latest adjustment by the Reserve Bank achieved a fairly muted market response, with little sign of more Kiwis rushing to take out home loans despite some of the lowest interest rates in over 50 years.
“That’s a crying shame and a lost opportunity for so many who should be buying their first home. Many couples could easily service a mortgage but struggle to come with a 20% deposit, not helped by high rents and living costs. In many cases the required deposit in Auckland is at least $200,000! That’s a huge barrier to entry,” he says.
“Of course, first-home buyers should always be required to stump up a decent deposit. However, them also getting a fair go is now well overdue,” says Mr Mitchell.
www.century21.co.nz
c

Next in Business, Science, and Tech

New era for Air New Zealand’s International Network
By: Air New Zealand
Government invests in Te Reo, environmental data research
By: New Zealand Government
27 percent increase in Trades Academy places
By: New Zealand Government
NZ company fined NZ$36,000 for unsolicited messages
By: Department Of Internal Affairs
EDS calls for urgent action on marine management
By: Environmental Defence Society
E tū: changing times as Air NZ cuts London services
By: E tu
Te Hiku Media awarded $13 million for language platform
By: Te Hiku Media
Bridges' officials claimed failed tech 'transformational'
By: RNZ
Using Data to Give Our Rivers a Voice
By: Seed The Change
Satellite-based remote lake health monitoring solution
By: Seequent
Government announces next steps in skills gap plan
By: New Zealand Government
Jacinda Ardern - Speech to CTU biennial conference
By: New Zealand Government
ITF welcomes additional vocational training places
By: Industry Training Federation
More Trades Academy places good news for primary sector
By: Primary ITO
Supported employers key to trades training review says MTA
By: Motor Trade Association
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media