|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Register free for JLL Future Cities Wellington here Dismiss
Last Article Uploaded: Monday, April 12th, 7:04AM


Latest Headlines

REINZ predicts negative and unintended outcomes

The Real Estate Institute of New Zealand (REINZ) predicting that the Reserve Bank’s proposed review of bank’s lending practices could result in negative and unintended consequences, including a reduction in rental housing stock and further falls in home ownership.

Saturday, November 12th 2005, 1:22PM

It warns that if the measures currently being discussed weree implemented; the outcome would be lower economic growth and the frustration of the aspirations of the many younger New Zealanders who currently seek to own their own home.

REINZ national president Howard Morley said: “We think the review is unwarranted in that it implies that housing sector and accompanying bank leading is the sole driver of inflation. Clearly this isn’t the case.

“It also indicates a possible marked departure from a market economy with a return to interventionism. The housing sector is cyclical and there are signs it is entering a period of consolidation; intervention of the type being discussed runs the risk of eroding the value of what is for most New Zealanders their largest asset.”

He said it is staggering to think that New Zealand could be back where it was 30 years ago when young home owners had to either know someone who played golf with the bank manager or who had a relative who knew a solicitor with a solicitor’s mortgage account.

The institute agreed with other leading commentators, noting that many small business owners were reliant upon being able to fund and expand their businesses by borrowing against the family home. Any limit placed upon residential property lending would simply increase the cost of capital for many such businesses, limiting their ability to expand and take on more staff.

“Imposing loan to value limits for on mortgages would frustrate younger New Zealanders being able to buy their first home, exacerbating the growth in the number of people having to live in rental accommodation and long-term trend of falling home ownership.

“We know that there is a social cost, as well as an economic one, associated with falling home ownership given the collation between home ownership and social participation and cohesion,” Mr Morley said.

“The prospect that the tax regime for residential property investment might change has serious implications for the rental property market. The suggestion that the LAQC structure should be reviewed implies that investors in property shouldn’t be able to enjoy the same ability to legitimately minimise their tax liabilities like any other business. The result will be that residential property investors will leave the market and the rental stock will decrease, with an increase in rentals.”

Instead, REINZ would prefer the governor of the Reserve Bank to continue its current approach of “best practice” monetary policy.

“The only good news, if you can call it that, is that the Reserve Bank has finally realised that the last eight OCR increases have done nothing to house prices because demand continues to exceed supply. “Contrary to some opinion, REINZ members aren't responsible for driving the housing boom. They are simply there to match buyers and sellers and conclude transactions in the shortest possible time. While there are bound to be some agents talking about the New Zealand market continuing on a buoyant course; that is not the view of the institute. Our assessment is that the market is about to enter a period of consolidation.

“If the market is left to sort itself out and market forces prevail, we will not see an erosion of property values, sales volumes may well ease but the risk of homeowners being left with negative equity in their properties will be avoided."

The institute trusts that cool heads will prevail and the officials at the Reserve Bank and the Treasury will step back from recommending a course of intervention.

“We don’t want to see a return to the days of old-fashioned interventionism; surely there are sufficient numbers of senior officials still around who will remember those days and why we left that all behind.

“The REINZ would be making a submission on behalf of homeowners and property investors, Mr Morley said.

« Hybrid 'Buyers Advocate' Service Launch PresentationSlight fall in October property prices »

Special Offers

Commenting is closed



Printable version  


Email to a friend
News Bites
Latest Comments
  • Are robots the future of advice?
    “Yeah/Nah another article talking financial advisers but really means to say financial planning... The bespoke needs of...”
    5 days ago by JPHale
  • [The Wrap] FSLAA isn't the only big change advisers need to be aware of
    “I watch with hope that FMA will decide to investigate potential and existing sharp practices that are nothing less than fraudulent,...”
    6 days ago by Chatterbox
  • Are robots the future of advice?
    “The majority of the 9,000 consumers surveyed globally said that they trust robots more than humans to help manage their personal...”
    6 days ago by All hat no cattle
  • Are robots the future of advice?
    “What a load of tripe - produced by someone with something to gain. The global experiment with RoboAdvice has demonstrated...”
    6 days ago by Pragmatic
  • Are robots the future of advice?
    “Of course Oracle would produce research supporting their products!! No surprise there. However, I doubt very much if serious...”
    6 days ago by dcwhyte
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News


Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.29 2.59 2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 ▼3.40 ▲3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - ▲2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.79 3.15
SBS Bank Special - 2.29 2.29 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.80

Last updated: 7 April 2021 10:22am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
Site by Web Developer and