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Advisers react to ANZ's LVR decision

Advisers have responded to ANZ's move to raise deposit requirements for investors. Here's what the industry said: 

Tuesday, December 15th 2020, 10:01AM 1 Comment

Bruce Patten

ANZ, the nation's largest lender, this morning mandated that residential property investors would need a 40% deposit to get a home loan. 

The bank will also recommend the Reserve Bank introduces a 60% LVR limit on investors from next year.

NZFSG's Bruce Patten said: "I would suggest that the Reserve Bank was going there in March anyway, and the banks have probably just decided to do something now. They also might have been [trying] to placate the Reserve Bank," he added.

AdviceHQ's David Green added: "The implications are largely unknown at this point as it really depends if other lenders follow or the RBNZ imposes the same restrictions across the industry. In the short term, investors with ANZ pre-approvals will be more aggressive and take a "get in while you can" approach. They may also look to other lenders.

"The ever-changing mortgage market makes it more important than ever to partner with an experienced adviser," he said.

Mortgage People's Martin Thomas is sceptical the move will take the heat out of the investor market.

"I am of the opinion that most of the investors are cashed-up, choosing property as their means of "retirement" investing due to historically low bank investment returns.

"Even if they pay $1.4 million for a property rented at $750 a week, their 2.6% gross return is better than what they can get elsewhere and in addition, they have the real bonus of property appreciation, even if they have to hold it for 10 years – which will further frustrate first home buyers."

He added: "Personally, I feel only new investors, in very small numbers, will be affected by this change."

The Advice Group's Stephen Wilton echoed those views.

"In a lot of instances it [LVR] has no effect," he said. "The extra 10% equity required has already been recently created within the existing owned properties."

Tags: ANZ Lending LVR property investment

« ANZ gets tough on investorsBright outlook for non-banks »

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Comments from our readers

On 16 December 2020 at 10:24 am krish@mortgagesuite.co.nz said:
This is where the Banks, The Reserve Bank and Government are all getting it wrong. 60% LVR may halt some investors but majority have sufficient equity in the wake of recent rises in properties values to continue adding to their portfolio's. What is really needed is to increase supply.

The government and RBNZ should be encouraging the banks to lend more towards construction of new homes, make borrowings for constructions easier, incentivise buyers to buy new homes by providing higher grants. Lock the grants in for (say) 5 years and if not you repay the whole lot. Reducing LVR's is one median but those with good equities will get richer and richer

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 ▼2.89 3.25 3.39
ANZ Special - ▼2.29 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
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 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.45 2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 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 2.99 3.09 3.15
SBS Bank Special - 2.49 2.59 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
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 4.54 2.93 2.99 2.97

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