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No more lending restrictions needed

The slower housing market means the latest LVRs are working and no more restrictions are needed, according to one real estate head.

Wednesday, January 11th 2017, 1:21PM

by Miriam Bell

The latest QV data, which was released today, shows that residential property value growth is slowing while activity and demand has declined in markets around the country.

The slowdown is most evident in the Auckland market.

Earlier this week, Barfoot & Thompson’s December data highlighted the ongoing plateau in Auckland prices, while realestate.co.nz’s December data revealed an increase in Super City listings.

This change has led one real estate agency head to call for an end to macro-prudential restrictions on the market.

Century 21 national manager Geoff Barnett said the latest, much tougher LVRs are hitting property investors and having the desired impact.

This is making it increasingly unnecessary for the Reserve Bank to introduce the likes of debt-to-income restrictions as was speculated last year, he said.

“We’re definitely seeing the return of a more normalised real estate market.

“More and more we’re seeing buyers setting the price, with vendors’ expectations slowly but surely getting more realistic.

“I doubt that the Reserve Bank or the government will be looking at implementing any further restrictions at this stage as the current ones are working.”

In Barnett’s view, there are unlikely to be any major market shifts in 2017 – instead any changes will be moderate and sustainable, kept in check by slowly rising interest rates.

“While 2017 may not reach the giddy and record-breaking heights of previous years, it’s still looking pretty strong with consumer and business confidence solid, as is population growth.

“The regions also continue to do well.”

However, he added that the fact this year is an election year could mean the second half of 2017 is quieter than usual as people opt to keep their hands in their pockets.

Barnett is far from alone in saying enough is enough on the macro-prudential policy front – but some are harsher in their verdicts on the impact of the LVRs.

Property Institute chief executive Ashley Church today criticised the Reserve Bank for making it very difficult for many first home buyers to purchase their first property.

He said the LVRs have totally missed the mark and that the generational impact of closing Kiwis out of the housing market would have huge knock on effects.

“It isn’t just about the value of the house as an asset.

“It’s also about what you can do with that house. Mums and Dads use the equity in their homes to buy businesses, fund further education, fund their retirement and help out their kids.

“Those options won’t be available for Kiwis who aren’t able to buy a home and it’s a disaster waiting to happen – not just for the individuals effected – but for the economy as a whole”.

A generation of renters, who won’t have the same ownership stake in the places where they live, could also have a negative impact on communities, Church said.

« DTIs not on the cards yet - RBNZWhat the RB governor said »

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Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼4.89 - -
Co-operative Bank - Owner Occ 6.25 ▼4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 ▼5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 5.29 5.39
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 6.79
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 5.89
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.33 5.79 5.93

Last updated: 11 August 2022 8:40am

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