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LVR move likely to hit provinces hardest: QV

Loan-to-value restrictions will be felt least in the cities with the hottest prices, QV said today as the organisation released its latest statistics.

Thursday, November 7th 2013, 12:00AM 1 Comment

by The Landlord

Its latest property value index shows values for October are up 8.9% over the past year, and 2.7% over the past three months, nationwide. They are now 10.4% above their previous market peak.

Research director Jonno Ingerson said that index was being driven by the price rises in Auckland and Canterbury. “Most of the rest of the main centres are also increasing but at a slower rate.  In contrast, many of the provincial and rural areas have declined in value."

Auckland’s prices are up almost 14% over the past year and Christchurch’s are 11.8% higher than the same time in 2012.

LVR restrictions introduced last month, which limit the number of low-deposit loans banks can do, could have a considerable impact on the market, Ingerson said. 

Many first-home buyers would have to reconsider their options.

“Some will choose to hold off and save more, some will find other sources of money to boost their deposit, and others will lower their price expectations. It will take some months before any evidence of this becomes clear."

But he said Auckland and Canterbury, where there was the highest demand for property, would probably feel the impact of the restrictions less.

“If some first-home buyers decide to drop out, there will still be other willing buyers. The lower number of first-home buyers also offers opportunities for property investors. First-home buyers are often driven by emotion and a desire to get into the property market. As a result they may pay more for a particular property than investors who are considering more whether the investment stacks up for a particular sale price."

Provincial centres would be especially affected, because the departure of first-home buyers could leave a lasting gap in the market, he said.

Values in Hamilton are still growing slowly, now up 1.7% over the past three months, and 5.1% over the past year.

Prices across the Wellington area have been flat, now sitting 2.3% above this time last year. 

Most of the provincial centres are still experiencing growth.  In the North Island, Whangarei, Taupo, Gisborne and Palmerston North are all up 2%-3% over the past year.  New Plymouth is up considerably, with 5.3% year-on-year growth and 2.1% growth over the past three months. 

Napier has seen a small decline over the past three months.

In the South Island, annual growth seems to be generally a little higher than provinces in the North Island.  Asburton, Timaru and Central Otago have all seen annual growth of over 6%, whereas areas such Kaikoura, Invercargill and Southland have seen limited growth if not a decline over the past year.

« Regional first-home buyers acting fast: REINZBuyers getting creative: Harcourts »

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Comments from our readers

On 9 November 2013 at 9:43 am cam said:
yes the clowns have hit the provincial areas with a hard blow, leaving these small towns hurting even more in the construction industry, and where do people have to go for jobs?? back to the city of course fuelling the citys growth even more, It should have been the other way around ,
no high LVR in the provincial so jobs are made in the small towns motivating people to move from the city,
Once again the reserve bank swings round the vines

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

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