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Real estate investors don’t believe ANZ’s measures to restrict lending to real estate investors will help other residential buyers, and some say the bank is only watching out for its own risk.
ANZ says changing its rules is a way to bring some balance back to the market (stock image).
Photo: RNZ / Claire Eastham-Farrelly
ANZ has announced that it will now require investors in residential properties to have at least a 40 percent deposit, up from 30 percent today.
The bank also called for big, bold and urgent action to slow down the housing market, warning that house prices could undergo a correction in the new year if they continue to rise as they had.
There are no changes to the deposit requirements for other residential buyers, including first-time homeowners.
Long-time real estate investor Olly Newland didn’t think a bank that increased its restrictions by 10 percent would make a difference.
“If they’re using other properties to put up collateral, that 30 to 40 percent won’t make much of a difference,” Newland said.
“If there are groups of people coming together to buy investment property, which is quite common, that will have an even lesser effect.”
He thought it would have unintended consequences.
“Real estate investors are necessary because when they get a property, they rent it. If there are fewer investors, there will be fewer rents, and that’s where the problem lies.”
When questioned about the fact that many renters want to own a home, he said that was always the case and that it was “a reality of the capitalist market that not everyone can own everything.”
The housing crisis was on sale, he said.
New Zealand Real Estate Investor Federation President Sharon Cullwick said that where there was a will, there was a way for real estate investors.
“We are often at the mercy of the banks, but there are always second-tier lenders that investors can turn to. As long as there are options for real estate investors, they will find options to move forward.”
She didn’t believe that the ANZ move was simply the bank that wanted to do the right thing with early home buyers.
“It seems very unusual for the bank to try to balance first-time home buyers entering the market over investors.
“My take on that would be that they are probably considering their own risk involved in that and think it is safer to invest in owner-occupied property than investment property.
She believed ANZ was looking for what was best for her about the economy.
ANZ CEO Ben Kelleher denied the move was related to risk or the bank’s financial stability.
“We evaluate each client on the basis of affordability. It’s about making the purchase of a home as affordable as possible for everyone. We are adjusting our setup to restore that balance.”
Will other banks follow?
Corelogic senior housing economist Kelvin Davidson believed the ANZ move was a sign of things to come.
“Once the pioneer is gone, we may see it from other banks as well,” Davidson said.
“This may well be where the Reserve Bank ends up anyway.
“Even if a bank doesn’t want to do it, they may not have a choice because it is a mandate from the Reserve Bank.”
The last time there was a 40 percent deposit requirement for investors was in 2017, he said.
That helped cut roughly 8 percent of investors’ market share over a year, but all banks participated.
It was difficult to say how much of an impact ANZ would have alone, Davidson said.
BNZ, KiwiBank and ASB told RNZ that they would not increase their 30 percent investor restrictions.
