Changes in the housing market – good for first home buyers

The new Government is in the process of implementing restrictions which may help take some of the heat out of Auckland’s housing market.

Policies such as the introduction of restrictions on offshore buying and a reduction in immigration numbers should help reduce some of the rampant demand for houses. But while these policies will help reduce some of the competition for houses, fundamentally there are not enough houses available in Auckland to meet the demand so we are unlikely to see a significant fall in prices. The pressure coming off the housing market will hopefully give you more time in your housing search to find the right house rather than rush to find any house.

Those who may benefit most from the cooling of the housing market combined with the changes in the LVR restrictions, which came into effect on 1 January, are first home buyers. Conditions are probably more favourable now than they have been in the last 4 years for first home buyers. The changes in the LVR restrictions now mean that banks can look at lending to more people who have less than a 20% deposit. Banks can now lend 15% (previously 10%) of their mortgage funds to those with less than a 20% deposit.

To put that into context; if you consider New Zealand’s largest bank, ANZ, has a residential mortgage book of approximately $73.5 billion, then based on that, the extra 5%, means they now have an extra $3.6 billion to lend to those with less than 20% deposit!

As mortgage advisors we have certainly notice that banks are far more open to this type of lending, so now is a great time to give us a call on 0800 881 886 and find out whether you may be in a position to get into the market sooner than you planned.

Translate »