ASB is moving to quickly increase the minimum deposit investors need for a house deposit in New Zealand by 10 per cent, in a move to support first home buyers.
Investors 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.
“ASB believes a balanced and sustainable housing market is in the best interests of all New Zealanders," CEO Vittoria Shortt 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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