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Rules affect landlords, too: NZPIF

Loan-to-value restrictions are having as much of an impact on investors as they are on first-home buyers, the New Zealand Property Investors Federation says.

Wednesday, March 12th 2014, 12:00AM

by The Landlord

The latest Real Estate Institute figures show that the number of properties selling for less than $400,000 fell 17.7% last month when compared with February 2013.

That has been pointed to as evidence that the loan-to-value (LVR) restrictions, which require banks to limit their lending to people with small deposits, has driven first-home buyers out of the market.

But NZPIF executive officer Andrew King said it showed that property investors, too, had left the lower end of the market and were not swooping in to pick up bargains, as had been predicted by some commentators.

A survey by NZPIF found that 71% of investors said they had not been affected by the LVR rules.

Only 7.87% said they would probably buy more property because of the LVR restrictions, but 13.48% said that these restrictions would cause them to buy fewer rental properties.

King said: “This contradicts the perception that property investors are benefiting from the effects on the market of the Reserve Bank’s LVR policy. The number of association members have been restricted in making property purchases by the LVR restrictions is higher than the number who stand to benefit from them. ”

He said it was $138 per week cheaper to rent than to own the average New Zealand home, which was another factor that would keep first-home buyers from purchasing.

"Many potential first-home buyers will look at the numbers and make the decision to continue renting. The expected rise in mortgage interest rates will make renting even more advantageous. “

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 4.09 4.49
ANZ Special - 3.65 3.59 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.54 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 3.99
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 3.59 3.99
Median 5.35 4.15 4.09 4.19

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