Investors pull back

Lending to investors has taken a dive, even before the impacts of the Government’s extension of the bright-line test and tax policy changes start to filter through.

CoreLogic senior property economist Kelvin Davidson says the tighter LVR rules from March 1 – and effectively before that because of banks’ own actions – have significantly curtailed the low-deposit investor flows.

“Banks had already moved well ahead of the official date for tighter LVRs, and went further, requiring a 40% deposit before the Reserve Bank’s date of May 1 for higher investor deposits kicked in. As a result, high LVR lending to investors has quickly returned to less than the mandated speed.”