New Zealand's biggest bank ANZ will require a 40 per cent deposit from residential property investors from today - "as a step to bring balance to the housing market".
The current requirement at ANZ is 30 per cent. There will be no change to the deposits required for first home buyers.
ANZ Managing Director of Personal Ben Helleher said the bank also said it will be recommending to the Reserve Bank that Loan-to-value ratios (LVRs) be set at 60 per cent for residential property investors, rather than the 70 per cent which has been proposed.
"We've been closely monitoring the impact on residential property prices of historically low interest rates, reduced LVR requirements and existing issues with supply and demand," Kelleher said.
"Escalating property prices are putting home ownership out of reach for many Kiwis. The current settings favour property investors particularly over first home buyers, potentially locking a generation of New Zealanders out of home ownership.
"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 people as possible.
"As New Zealand’s largest home lender, decreasing the LVR on residential investor lending is one thing we can do to help bring balance to the residential property market."
ANZ said it has seen a record two months of residential property lending, with 32.4 per cent going to residential property investors, and 18.3 per cent to first home buyers.
Kelleher said ANZ would be be guided in the longer term by the outcome of the Reserve Bank's consultation process early next year.