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ANZ has become the second bank to reimpose limits on low-deposit loans to real estate investors.
Photo: RNZ / Nate McKinnon
The Reserve Bank plans to consult banks on recovering loan-to-value ratios next year, but ASB jumped the gun and reintroduced one yesterday.
LVRs were suspended by the RBNZ when Covid-19 first emerged as part of its measures to keep money flowing through the economy.
The central bank will bring them back in March to cool down risky lending in the booming real estate market that had been fueled, in part, by real estate investors taking advantage of historically low interest rates.
“Today we have made the decision to increase the deposit required by real estate investors to 30 percent, up from 20 percent today for new home loan applications as of December 7,” said the managing director of personal business at ANZ, Ben Kelleher.
October had been a record mortgage month for ANZ, with 31 percent of its loans going to real estate investors, while 19 percent went to first-time home buyers.
Kelleher said that everyone cares that residential property prices are sustainable and that home ownership is affordable.
“Covid-19 has made the housing market and credit decisions more complex, and we believe that any step we can take to increase balance and sustainability in the market is the right thing to do.”
Of the other major banks, BNZ said it already had a prudent approach to lending and would not reimpose the limits.
“As with all of our pricing and credit setups, these remain under regular review, but we have no changes to announce at this time,” a BNZ spokesperson said.
Kiwibank echoed the same message, saying that it would continue to lend responsibly and would be “acting in the spirit of the Reserve Bank’s leadership.”
Westpac said it had never raised the LVRs when the changes were first announced.
