House Prices

Investors still sitting on the fence

Although investors are not pulling away from the housing market in droves as feared they are not buying again either even though there is an easing of the credit crunch.

Thursday, April 28th 2022

Despite the easing of the crunch caused by tightened LVRs and the implementation of the Credit Contracts and Consumer Finance Act, mortgage brokers are still finding it tough going.

In the latest Tony Alexander and survey, mortgage advisers say credit access is becoming less of a barrier to buyers but they are still staying away from auctions and open homes because of falling house prices and talking of people moving to Australia.

Advisers’ comments indicate that implementation of CCCFA rules remains inconsistent between the banks and credit availability overall is tight. However, some easing is evident including greater availability of low deposit lending.

“There still seems to be confusion between mainstream banks on how to interpret the CCCFA rules, all mainstream banks have applied the rules in drastically different ways.

Advisers say as the rules change weekly depending on funding position, it is impossible for them and clients to operate.

The survey results show investor negativity remains with a net 45% of advisers saying that they are seeing fewer investors.

Alexander says essentially, there is no change in the underlying level of investor interest in making a new purchase – low – ever since the announcement of tax changes last year.

He says mortgage advisers say it is getting tougher for investors to borrow from banks in terms of scaling rental income. Essentially clients have to be more able to service the lending on their own bat.

Banks are requiring the age of investment property to be provided, i.e. before or after 27 March 2020.

However, one lender has relaxed some of its criteria slightly but not enough to make a significant difference.

Mortgage advisers say the lender is not scaling rent as much as they were and no longer require evidence of rates and insurance costs for investment properties  - although it still takes into account the declared costs in the debt servicing calculation.

Many advisers have noticed investors looking at development options on their existing properties rather than buying another.

Banks messages differ

There have been mixed messages from the big four banks.

One of the big four approached a mortgage company asking for more business. “An application was sent to that bank that day as it promised great turnaround times and a good deal for the client. Application got pushed back by the bank’s broker unit saying couldn’t do xyz for a customer and no promises on time frames. Disconnect.”

Other mortgage brokers say they have noticed  there is not much urgency at the banks. One busy broking company pointed out bank turn-around times have blown out massively. “It feels like there are a few things happening that show low appetite right now.


No comments yet

Kainga Ora - First Home Buyer Special 2.25
Heartland Bank - Online 3.85
The Co-operative Bank - First Home Special 4.19
SBS Bank Special 4.19
ICBC 4.29
The Co-operative Bank - Owner Occ 4.29
Select Home Loans 4.29
TSB Special 4.34
HSBC Premier 4.39
China Construction Bank Special 4.45
AIA 4.49
Heartland Bank - Online 4.70
SBS Bank Special 4.85
Select Home Loans 4.86
TSB Special 4.99
ICBC 5.09
HSBC Premier 5.15
The Co-operative Bank - Owner Occ 5.19
Kiwibank Special 5.19
Westpac Special 5.19
China Construction Bank Special 5.19
First Credit Union Special 5.20
Select Home Loans 5.20
TSB Special 5.75
Kiwibank Special 5.79
Westpac Special 5.89
ICBC 5.89
HSBC Premier 5.89
The Co-operative Bank - Owner Occ 5.95
SBS Bank Special 5.95
BNZ - Classic 5.99
Resimac 6.33
China Construction Bank Special 6.35
ANZ Blueprint to Build 2.78
Pepper Essential 3.44
Heartland Bank - Online 4.00
Select Home Loans 4.09
Resimac 4.59
TSB Special 4.79
Liberty 4.84
Kiwibank Special 5.00
Kiwibank - Offset 5.00
Kiwibank 5.00
Wairarapa Building Society 5.24

More Stories

House price caps off First Home Loans

Thursday, May 19th 2022

House price caps off First Home Loans

The Government is to make it easier for more people to get into housing.

The next property frontier

Thursday, May 19th 2022

The next property frontier

Private space tourism took a giant leap forward last year and this has pundits wondering about hotels and other buildings popping up any time soon.

Illegal car removals costs landlord thousands of dollars

Thursday, May 19th 2022

Illegal car removals costs landlord thousands of dollars

A Hamilton tenant who claimed his landlord removed two ‘classic Japanese’ cars from his rented home without his knowledge or permission has been awarded $1500 compensation and $2000 in exemplary damages.

Prices for development land set to skyrocket

Wednesday, May 18th 2022

Prices for development land set to skyrocket

Land values are expected to rise even further when councils accelerate housing intensification under the Government’s National Policy Statement on Urban Design (NPS-UD).