Strong disapproval of ban on low home deposits

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Nearly 40% of New Zealanders would disapprove of any Reserve Bank move to require home buyers to have a minimum 20% deposit, a HorizonPoll survey finds.

Friday, May 24th 2013, 10:47AM 7 Comments

Horizon said 36.6% of respondents would approve if a deposit requirement were imposed by the Reserve Bank using a new tool in order to help deal with high housing demand and prices in Auckland and Christchurch.

However, 24.4% are not sure when asked if they would approve or disapprove of minimum 20% deposits being required to secure a mortgage from a bank in New Zealand.

The Horizon Research survey finds there is majority support (50.8%) for the Reserve Bank's move to require the four largest Australian owned banks operating in New Zealand (ANZ, Westpac, BNZ and ASB) to have greater reserves to cover any default by home owners with high loan to value ratios. Only 18.3% oppose the need to have larger reserves, while 30.9% are not sure.

Opposition to the idea of requiring a 20% deposit for bank mortgages  runs in a strong seam among those aged 18 to 54 year-olds (between 42.7% and 48.8% disapprove),  and middle to higher income households.

By occupational group, disapproval is highest among labourers, agricultural and domestic workers (61.2%), teachers, nurses, police and other trained service workers (59.5%), business managers and executives (58.2%)  and homemakers not otherwise employed (54.5%).

Approval is highest among those aged 55+ and retired superannuitants (49.7% approve, 13.6% disapprove).

In comments on the impacts, if any, which higher deposit requirements may have most respondents said it would be severe. Many complained it would delay or end their intention to buy. Others complained they were not on a level playing field: that overseas buyers were borrowing at lower interest rates offshore – and bidding prices up on the New Zealand market.

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