by Susan Edmunds
Banks have to lend no more than 10% of their new loans to people with a deposit of less than 20%.
But since November, they’ve been operating well below this target.
In February, just 4.2% of new lending was to borrowers with equity of less than 20%, after exemptions.
That's slightly up from 3.8% in January but still down from 4.7% in December and 5.8% in November.
Broker Dave Windler said the absence of first-home buyers in the market had become noticeable.
He said people were often still not aware of ways they could still get a loan, such as via a Welcome Home Loan, through the new build exemptions or by using KiwiSaver funds.
“There’s lots to work through and those we see need plenty of direction and I’m sure lots have given up.”
Banks have indicated over recent months that they may start to increase their lending to low-deposit borrowers now that their systems have been adjusted to fit with the rules.
Auckland real estate agents said they had seen more activity from Kiwibank over the past month but spokesman Bruce Thompson said there had been no official change in policy.
“We have always been agreeable to consider applications up to 90% either through the Welcome Home scheme or of course the allowable percentage under the restrictions. [There’s been] no change in policy, but we have always said that we are prepared to consider applications from people with deposits less than 20% and that our priority is first-home buyers rather than investment purchases.”
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