Pinning down finance

Securing property finance is becoming increasingly difficult in today’s world.

In a marked change from recent, more accommodating times, banks have tightened up their property lending due to rising funding costs and a decline in deposits.

At the same time, officialdom has been upping the lending restrictions ante.

But commercial property is not subject to many of the conditions and requirements of the new environment.

For example, the Reserve Bank’s latest round of LVRs apply to residential investors, not commercial investors.

So does that mean that getting a loan from a bank for a commercial property investment is easier? Well, yes and no...

LVRs might not be an issue, but commercial property carries more risk than residential property and lenders take this into account.

For that reason, there is a broader range of factors that lenders look at when assessing loan applications.

And they are more exacting in the criteria they apply to them.

In the February issue of NZ Property Investor magazine, we explore what investors need to expect, and prepare for, when seeking finance for a commercial property.

To read more about pinning down commercial property finance, click here to get the digital issue of NZ Property Investor magazine.

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