Lack of clarity around new LVRs
As of this week, Auckland investors need a deposit of at least 30% - as opposed to 20% - in order to get a bank loan to buy a rental property.
But at the same time banks are now allowed to lend 15% of their new loans to borrowers with less than 20% equity, outside Auckland. That includes investors and is up from 10% previously.
The Reserve Bank first announced the change to the LVR restrictions, which are meant to curb Auckland’s runaway housing market, in May.
Since then there has been much discussion about the impending changes and their potential impact on the market and investor activity.
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