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RBNZ: Investors will require 40% deposit from September
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Yep, property caught up with historical growth rates in a hurry. I think second tier lenders, peer-to-peer etc will be back in force very soon.Free online Property Investment Course from iFindProperty, a residential investment property agency.
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Just to be clear this is 40% LVR restriction nationwide. Therefore, this is not limited to investments properties in Auckland region only.
This is a much larger restriction than I imagined. Interested to see how this will play out now ...www.PropertyMinder.co.nz
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My thoughts are that we will be in for a busy 6 weeks as property investors who can buy do buy.
Then property investors will go into lock-down holding their rentals as they will not be able to buy again if they sell.
Property investors will then take advantage of lower interest rates which will soon follow and start to pay down debt.
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Well the OCR is tipped to drop.
Thinking out loud. If a house costs $500,000 and you pay a deposit of 20%...
20% LVR: $400K lending at 4.5% = 18K per year
New rules:
- $300K lending at 4% = $12K
- $100K lending at 7% = $7K (secondary lender, this is a guesstimate rate, I've asked a couple of brokers what they think)
- Total $19K per year
So, $20 per week difference. You can still buy your house, it'll just cost you a few coffees more.
I might be (usually am) wrong and the 2nd mortgages are way higher, I just assumed a spread of 3%.Free online Property Investment Course from iFindProperty, a residential investment property agency.
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Yep now on NZH too with JK on video.
What I find quite frustrating is RBNZ are supposedly independent of Govt and said.....
Reserve Bank deputy governor Grant Spencer on July 7 said that the bank was considering new LVR restrictions, but would not introduce them before the end of the year.
source
cheers,
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Originally posted by Grads View PostI'd say the market (NZ wide) will be very active in August!!
Pre-approvals might stay, but any new lending will be under the new rules.
RossBook a free chat here
Ross Barnett - Property Accountant
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Originally posted by Nick G View PostWell the OCR is tipped to drop.
Thinking out loud. If a house costs $500,000 and you pay a deposit of 20%...
20% LVR: $400K lending at 4.5% = 18K per year
New rules:
- $300K lending at 4% = $12K
- $100K lending at 7% = $7K (secondary lender, this is a guesstimate rate, I've asked a couple of brokers what they think)
- Total $19K per year
So, $20 per week difference. You can still buy your house, it'll just cost you a few coffees more.
I might be (usually am) wrong and the 2nd mortgages are way higher, I just assumed a spread of 3%.
Watch out for the unintended consequences of this intervention...
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Originally posted by ChrisD View PostWhere exactly are you pulling this number from? Somewhere warm and dark I assume.
No idea what propNZ was referring to but I, too, am curious to know where this number came from.www.PropertyMinder.co.nz
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# Ad Hoc Tenancy Services / Rental Inspections / Terminations and Notices
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I read it to mean if there's a 10 % drop in property value you need to make up the difference - so if you borrowed with a 40% deposit then 10% was wiped off the property's value you will need to cough up more.
cheers,
DonnaEmail Sign Up - New Discussions, Monthly Newsletter, About PropertyTalk
BusinessBlogs - the best business articles are found here
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