Lending policies changing rapidly
Joel Oliver, managing director of Auckland-based advice business SuperCity Mortgages, says the shock from Covid-19 has caused banks to adjust their lending policies, making things difficult for borrowers.
Reduced cash-back offers, tightening of controls around investor lending and reluctance to take on new borrowers have been a feature of the market since the Covid-outbreak.
"We saw this exact same thing in 2009 after the GFC, and also a bit in 2013, when responsible lending came into play," Oliver says. "After these events, banks are finding their feet and eventually they level out to the same viewpoint."
Oliver notes the vast difference in banks' treatment of investors. BNZ has tightened credit conditions for all borrowers, and the rest of the big four are reluctant to lend past 70% LVR to investors, despite LVR rules being scrapped. Kiwibank, on the other hand, is said to be supporting investors with loans above 70% LVR since the Reserve Bank changes.
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