(11 August 2015 – New Zealand) Bank of New Zealand (BNZ) is the last of New Zealand’s biggest banks to introduce tough new lending rules for investors, designed to curb house price frenzy particularly in Auckland.
The banks’ parent companies have made the same moves in Australia, by raising mortgage rates for residential property investors.
At the beginning of August, the New Zealand banks began making their moves, with ASB Bank, ANZ and Westpac already cutting back on lending to investors with less than 30 percent deposits, or security for properties.
BNZ’s changes will take effect on 14 August.
The Reserve Bank of New Zealand (RBNZ) gave a deadline of 1 October for banks to bring the loan to value ratio (LVR) restrictions on investors, however the Auckland housing market in particular has meant the sooner banks place the restrictions the better.
An ANZ spokesman told reporters the RBNZ had asked banks to act in the spirit of the LVR restriction changes in advance of the formal implementation date.
“As such, we have taken steps to ensure we comply with the spirit of the restrictions.
“We are not issuing any new pre-approvals or approvals for over 70 percent LVRs if the purpose of the loan or top-up is to buy an investment property in the Auckland Council area,” he said.
“Our intention is to honour all our existing pre-approvals and loan approvals for customers until they expire.”