Reserve Bank Changes For Auckland Property Investors

13 May 2015

The Reserve Bank governor, Graeme Wheeler, announced this morning;

30% deposit required for Auckland investment properties.
Outside of Auckland, a change from 10% to 15% of loans being allowed over 80% - This should make it easier for more people to buy homes outside of Auckland.
Banks will be required to hold more capital for property investors, to reflect the 'higher risks inherent in such lending'.
Likely to take effect from 1/10/15. But banks will most likely start to use this criteria from now onwards, with it being harder to borrow 70% to 80% on Auckland investment properties from now on.

The likely effects of this:

Auckland market? I think it is too early to know how big the effect will be on Auckland house prices, and with the large demand it might be barely noticed initially. Long term it must take some of the buyers out of the market.
More possible buyers in other areas, should allow other areas to experience growth. Hamilton is likely to be further targeted by Aucklanders who now can't buy in Auckland with the new 30% investor threshold, but can probably borrow 90% on a Hamilton investment.
Property investor interest rates over the whole country are likely to go up, as the higher capital requirement is introduced. Banks could start pricing that in immediately for investors.

Here are a few articles:

Kind regards

Ross Barnett

YES! I want to learn more about property investments.