Window of opportunity for first time buyers
28 November 2018
LVR announcement creates window of opportunity for first time buyers says REINZ
The Real Estate Institute of New Zealand (REINZ) is not surprised that the Reserve Bank of New Zealand has left Loan to Value Ratios (LVRs) on hold for owner occupiers as New Zealand’s two-tier market will still be causing the Reserve Bank some concern.
However, REINZ welcomes the lowering of LVRs for investors from 1 January 2019.
Bindi Norwell, Chief Executive at REINZ says: “With house prices stabilising in Auckland for 19 months now, REINZ has been advocating for an easing of LVRs for first time buyers. However, with house prices continuing to rise and reaching record median prices in a number of regions we’re not surprised that the Reserve Bank has chosen to leave LVRs for owner occupiers as they are for now.
“The fact that banks have the opportunity to increase the percentage of new lending from 15% to 20% of their total loan book means there is a chance for more first time buyers to have access to lending that they haven’t previously had,” continues Norwell.
“We continually hear feedback from real estate agents around the country that with median prices rising to record levels in the regions that first time buyers are just finding it too difficult save that deposit to purchase their first home and to get into the property market. Any window of opportunity for young couples to get a foot on the property market is to be welcomed,” she continues.
“We also welcome the news that LVRs for investors have been relaxed from 35% to 30% as with the raft of legislation currently facing investors, many have announced their intention to exit the market. Today’s announcement may go some way to supporting the continued supply of rental properties across New Zealand,” concludes Norwell.