Archive for July, 2016

New LVR Restrictions

The Reserve Bank announced further changes to the existing LVR restrictions currently imposed on NZ Banks:
• No more than 5 percent of bank lending to residential property investors across New Zealand would be permitted with an LVR of greater than 60 percent (i.e. a deposit of less than 40 percent).
• No more than 10 percent of lending to owner-occupiers across New Zealand would be permitted with an LVR of greater than 80 percent (i.e. a deposit of less than 20 percent).
• Loans that are exempt from the existing LVR restrictions, including loans to construct new dwellings, would continue to be exempt.
Banks are being asked to impose these ratios now, even though they are effective as at 1 September 2016.

The Reserve Bank is also working on potential loan to income ratios, which, if imposed will clobber Auckland and high valued parts of the country.

I expect that these new measures will have an effect on Buyers ability to borrow, and some Buyers will have to purchase more modest properties. Investors will be particularly affected, however many have considerable equity.

Feilding and our region remains very affordable though compared to most of NZ, and we may see more people buying in our patch for that reason.

Kind regards
Michael Ford

Feilding v Palmerston North

MS - 12cm x 2 col (7.59cm) Column 14-07-16 (1)

A Great Time to Sell

There are far more Buyers than properties for sale, providing Sellers with great selling opportunities. We frequently have more than one Buyer trying to purchase the same house, providing increased competition.

Traditionally Winter in Feilding and District is a strong time to sell, with more sales in Winter than Summer.

Low interest rates, relaxed LVR ratios, improved HomeStart Grant criteria and Welcome Home Loan criteria are all fuelling the local property market. We now have plenty of first home buyers back in the market, after a period without them through from late 2013 to April 2015.

Our part of New Zealand is very affordable compared to most, and we are attracting people from other parts of the country, particularly Auckland, and from overseas.

This has all lead to some increases in property values, which are welcome after 8 years of stagnant values. Call me to find out more.

Kind regards Michael Ford