Five or more properties?

[AlFensome]

Hi guys,

Some of you might remember me - I'm a property reporter at the Dom Post. Did you know about the Reserve Bank proposal to move people with five or more properties into the commercial interest and deposit categories with major banks? They've proposed this could be the next stage of LVRs. So they'd be treating guys who have a few properties basically like big time real estate investors. It's in their policy paper Summary of submissions and final policy decisions on the Consultation Paper: Review of bank capital adequacy requirements for housing loans.

Would be interested to hear your thoughts and if you're Wellington based perhaps we could go on the record? PM me if you like.

Cheers.

[speights boy]

Al
Some thoughts here....

https://www.propertytalk.com/forum/showthread.php?34880-New-RBNZ-Lending-Rules-5-or-more-properties

[Davo36]

You won't do an article on it, too boring for your paper.

You'll do something about landlords creaming it whilst tenants suffer or something.

[Leftette]

UK banks charge a premium interest rate on an investors 1st rental. TBH, I'm surprised it hasn't taken longer to get to NZ.

Davo - with the obligatory sad faces from the shoeless & dirty kids on the couch next to them (the hard done-by tenant). Just make sure, Al, that you photoshop out the packs of ciggies on the coffee table and the PS4 under the tele, ok?

[AlFensome]

I really don't think you need to speak to me like that, Davo36. I was asking for your opinion about an issue which affects a lot of people on this forum. No wish to get into an argument with anyone, it was a polite inquiry and nothing more.

[Leftette]

Surely it's no secret amongst you journo types, Al, that you lot are considered left-leaning. I'm left leaning and it gets depressing how one-sided articles on tenants and landlords can be. There are exceptions, and but they are just that.

[AlFensome]

Oh I know you think we're all raging lefties . I guess what I mean is all I'm asking is for your opinions and giving you the opportunity to talk about something which affects you. It's a conversation and there isn't any need for it to go down this kind of route.

[Keys]

Then surprise us.
Put a few days into reading this site. As noted above, we've beed discussing the topic for a long time already.

[Leftette]

Al - why not do an article on the property-WOF law that's being considered. Awful & ill-thought through, imo, with enough gaps through which a bus could U-turn without the need for those annoying BEEP BEEP BEEP backing tones.

[AlFensome]

Yes I am waiting on the results of the first batch of WOFs from Wellington City Council. Will be interested to see how they go.

[speights boy]

Alex,

In the thread there is a link to the interest rates thread.
This post # 2604 from 'Brendan' seems to indicate s/he has some knowledge on the matter.
www.propertytalk.com/forum/showthread.php?192-Interest-Rates/page261
Hopefully they may chip in.

Personally I am in favour of proposals such as this, if indeed it does lower property risk for our banks.

Re these two options:

For property investors the Resserve Bank has came up with two options to define when rental property debt is considered commercial.

1. If the borrower is dependent on the income generated by the residential property to make mortgage repayments, then the loan is treated as a business rather than a residential mortgage loan.

2. A set limit on the number of dwellings that can be included in a residential mortgage loan. This second option is intended as a more pragmatic solution that recognises some borrowers invest in a second, third or fourth house while continuing in their usual occupation. However, for some with an increased number of dwellings, the investment becomes a business rather than a supplementary source of income.

For me, one question would be why the Bank chose option 2.
If I was to guess, it would be due to ease of administration and monitoring, without the more subjective 'income dependency' calculation which would change over time and require regular disclosure from the borrower.

Option 1, in many cases, would be more relevant however.

Perhaps it's even because that the number five can be easily altered by the RBNZ....much like an LVR restriction percentage can be.

[imd6662]

Oh I know you think we're all raging lefties . I guess what I mean is all I'm asking is for your opinions and giving you the opportunity to talk about something which affects you. It's a conversation and there isn't any need for it to go down this kind of route.

Don't take Davo to heart too much. Do spend some time here looking at different views... you might be surprised that positions aren't as narrowly aligned to pure self-interest as you might expect. And please DO by all means, try and bring some investigative perspective to what appears in our papers all the time.

[Bluekiwi]

Hi guys,

Some of you might remember me - I'm a property reporter at the Dom Post. Did you know about the Reserve Bank proposal to move people with five or more properties into the commercial interest and deposit categories with major banks? They've proposed this could be the next stage of LVRs. So they'd be treating guys who have a few properties basically like big time real estate investors. It's in their policy paper Summary of submissions and final policy decisions on the Consultation Paper: Review of bank capital adequacy requirements for housing loans.

Would be interested to hear your thoughts and if you're Wellington based perhaps we could go on the record? PM me if you like.

Cheers.

Yeah nah we all got the ruling wrong, apparently its 5 or more fruit or veges you have to take daily, if your moved into business banking.

[Leftette]

Moving into business banking is more than enough to give you the runs, BK. You don't need all that roughage as well.

[ScottSI]

Can you help? As I read the article in the dominion this morning, I read that Jackie Thomas-Teague points out about the multi million dollar 15% return commercial deals.

I get commercial at about 6 % so would be very keen on buying some. I can't find them but I am new to the commercial game so where do I look ?