colinrealestate

The banks will be restricted to having no more than 10% of the value of their new home mortgages lending at loan to value ratios above 80%. The question has been whether this will have the desired effect of slowing the rising house prices.

The LVR will definitely slow down first home buyers and investors who usually require loans of more than 80% of the property value. Although a recent BNZ/REINZ survey reveals that many first home buyers will seek ways around the LVR, using equity from parents and other assets where possible to reach the threshold now required by the banks.

However, it is well recognised that Auckland and Canterbury are still driving the national increase in value, with other main cities seeing limited growth. We have seen provincial New Zealand with little growth in sale prices, although this is slowly changing.

Auckland and Christchurch markets still continue to be driven by supply and demand situations within these regions. The lack of housing will become considerably worse as migration figures show a potential boom in people returning to Auckland and less leaving NZ for Australia due to the current uncertainty of their economic growth.

Filed under: REAL ESTATE | Tagged: Real Estate