Reserve Bank tightens LVR rules for investors

So let me get this right. The Reserve Bank in April last year lowered the bank deposit requirements for investment mortgages. COVID impacting property investors was their rationale but this never made any sense. At the same time the Reserve Bank did everything in their power to lower interest rates for borrowers which has had the same flow on effect to the returns that people receive on their savings at their bank. That the Reserve Bank didn’t consider the possibility that property might then become the preferred form of investment for most New Zealanders despite all the warning signs of rising house price inflation is deeply troubling. The Reserve Bank are the ones that created the current market frenzy in the housing market. Not investors!

Only 2 things will fix this. 1. Investors can only build new not buy existing stock and 2. Get rid of interest only loans for investors THAT will sort out the housing market for sure. Even at low interest rates, the repayments between IO and P&I is quite significant on a large mortgage. I have a number of investment properties with a split of IO and P&I and I know it would start effecting my cashflow if this was enforced. Secondly, PLEASE fix the RMA it's a mess. Spend more on infrastructure and open up more land, it'll pay off long term. We also pay ridiculous prices for building materials down here, compare to even Aussie they are so much cheaper to build. Less money to those creaming it on products and more per hour wages for tradies will balance the scale to build new and put more money in workers pockets will draw more people into trades too. Sure the developers are making good money at the moment, but they are increasing supply and putting up the risk - they aren't directly influencing house prices they are just making the most of the current market. Supply and Demand, Economics 101.