Investment property loans aren't so risky: S&P

Friday 5 March 2004

Loans on investment properties are no more risky than loans to owner-occupiers, S&P says.

By The Landlord

Although there are warnings on both sides of the Tasman about the implications of the growth in lending for residential investment, ratings agency Standard & Poor’s says the evidence shows that loans to investors are no more risky than loans to owner-occupiers.

While its comments relate to the Australian market, the environment in New Zealand is very similar.

"There has been a great deal of hype recently regarding the growth in lending for residential investment and the impact that it may have on the Australian economy, the level of household debt, the performance of residential property markets and the quality of bank balance sheets," S&P says.


And like our own Reserve Bank governor Alan Bollard, the Reserve Bank of Australia has issued repeated warnings to borrowers not to over-extend themselves on housing. Where Bollard has so far raised interest rates only once, the RBA has hiked its key interest rate twice in recent months.

Read More - Opens in a new window
Commenting is closed

Property News

Share your views on property investing

It's that time of the year where we run the NZ Property Investor's survey of investor. Take part and be in to win.

House Prices

Values pick up the pace

There’s a more upbeat feel to the property market and it’s obvious in this month’s QV data which has values firmly on the rise.

Commercial

Commercial disrupter proves popular

New commercial property disrupter, Jasper, has hit the ground running with their first investment offering achieving full subscription in just 36 hours.

Mortgages

LVRs kept on hold

The Reserve Bank has kept its LVR speed limits on hold amid fears low interest rates "could lead to a resurgence in higher-risk lending".

Site by PHP Developer