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  • The other factor is IF you think it likely the RBNZ is going to put some restrictions on investor borrowings.
    If you do, then squaring everything away now MAY prove to have been a good move when looking back.

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    • Yes hadn't thought of that either. So true SB

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      • Based on history, lock them in man!!




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        • Pretty compelling graph there Damap! I think I'm convinced.

          SB I was thinking about how the RB's new rules - if they intro any, which I'm pretty sure they will - would effect existing investments. Surely they won't be able to apply something retrospectively? I would have thought it would be based on new purchases / lending?? The uncertainty provides a strong argument for locking in for the long haul.
          “Our favorite holding period is forever.”

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          • Originally posted by donthatetheplayer View Post
            Surely they won't be able to apply something retrospectively?
            No, I don't think so either.

            Remember though; the RBNZ sets the rules which the banks must follow as a minimum.
            How an individual bank reacts and implements those restrictions may vary, and could well be beyond what the RBNZ requires.
            We don't know yet.

            For example: A bank may wish to attract new lending from new customers in this category.
            To meet any overall limits, they may wish to reduce a current customer's exposure.
            Who knows?
            Just some thoughts.

            Looking at the current high demand from investors / speculators seeking capital gain (as opposed to yield) in the AKL market; if the Rbnz is going to introduce anything they are going to have to be significant.
            Otherwise they will have little effect.
            Last edited by speights boy; 17-02-2015, 11:57 AM.

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            • So, if for example it's a 5 property limit before commercial loan criteria apply and someone has more than 5 properties, when they go to refix the bank may refuse?
              “Our favorite holding period is forever.”

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              • The "smart" thing is to for 5 of more properties to be commercial lending. That will successfully stuff things up for us all because it catches everybody retrospectively.

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                • Yes and no. What if I own 4, my wife owns 4, my trust owns 4... Old Wheeler is a crafty cookie. He'll come up with something we don't like.
                  “Our favorite holding period is forever.”

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                  • If you are associated which most investors already are they are instantly caught. The banks can recall the loans, redoc them to ten years and increase interest rates. Would be horrendous but is possible. If they chose not to grandfather it that would save existing lending but stuff up buying more....

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                    • Originally posted by Damap View Post
                      If they chose not to grandfather it that would save existing lending but stuff up buying more....
                      I'm picking this. If they grandfather it quite a few people will lose their shirts. Not me but it will put an end to further property investing for me. = Wheeler wins.
                      “Our favorite holding period is forever.”

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                      • Originally posted by donthatetheplayer View Post
                        Yes and no. What if I own 4, my wife owns 4, my trust owns 4... Old Wheeler is a crafty cookie. He'll come up with something we don't like.
                        I don't think number of mortgages will be a big factor.
                        It looks more like income / debt ratios, if the "chatter" is to believed.

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                        • Originally posted by donthatetheplayer View Post
                          Not me but it will put an end to further property investing for me.
                          = Wheeler wins.
                          Plus, those who don't need to borrow as much also win.

                          Plus of course foreign buyers.
                          But that ball is in the Govt's court; not Mr Wheeler's.
                          Anyway, the Govt says it's not a problem so there is nothing to worry about foreigners replacing locals in our market.

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                          • Income / debt ratios could get interesting. I'm currently sitting at 60% LVR but in a year that could be 50% or it could be 80% Likewise my income can fluctuate a lot per annum. I suppose it only matters the day you apply for the lending?
                            Last edited by donthatetheplayer; 17-02-2015, 12:53 PM.
                            “Our favorite holding period is forever.”

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                            • Of course, if they just got more houses built in Auckland and Christchurch, or stopped so many people coming into the country, the problem would go away.
                              Squadly dinky do!

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                              • Indeed Davo.
                                However the RBNZ is left to deal with the problems caused by the Govt's inaction.

                                For purely political reasons the Govt has abdicated to the RBNZ.

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