Source: MIL-OSI Submissions
ASB is moving immediately to increase the minimum deposit required from investors in the wake of the Reserve Bank of New Zealand’s announcement yesterday that it is considering the reintroduction of loan-to-value restrictions (LVR) in March 2021.
ASB’s Chief Executive Officer Vittoria Shortt says, “ASB believes a balanced and sustainable housing market is in the best interests of all New Zealanders. While we appreciate the RBNZ taking the time to consult, this is about helping Kiwis build their financial futures during exceptionally challenging times so we are choosing to take this step now.”
Ms Shortt says the lending market has improved markedly since New Zealand went into its first lock down. COVID-19 hasn’t impacted the property market as anticipated and ASB is now witnessing rapid growth in lending volumes.
“The number of applications we’re receiving is at an all-time high, up 70% on this time last year, and while the proportion of first home lending is up, we have observed since COVID-19 a rapid increase in lending for investors. If this increase in investor demand continues it could lead the country down a potentially unsustainable path.
“Our focus at ASB is on working with the Government on offering first home buyers opportunities to get onto the property ladder. That’s why we’re immediately committing to requiring investors to have a 30% deposit rather than the current 20%. Pre-approvals already in place are unaffected.
“For us, it is about being a prudent and responsible lender. We all have to play our part and we’re confident Kiwis looking to buy their first home will welcome this move,” adds Ms Shortt.