20% deposit needed to buy a house from oct
 

This in the paper and in the news today about 20% deposits for houses now required....

http://www.nzherald.co.nz/business/n...ectid=11111719

How the changes will work
Three properties currently on the market
Three-bedroom home in Clendon Park
Asking price: $350,000
Previously: 10% deposit of $35,000.
Under new rules: Minimum 20% deposit of $70,000

Three-bedroom home in Browns Bay
Asking price: $658,000
Previously: 10% deposit of $65,800
Under new rules: Minimum 20% deposit of $131,600

Three-bedroom townhouse in Campbells Bay
Asking price: $980,000
Previously: 10% deposit of $98,000
Under new rules: Minimum 20% deposit of $196,000

Re: 20% deposit needed to buy a house from oct
 

Not strictly true. Banks are limited to how many high LVR they can sell "In a speech today, governor Graeme Wheeler announced that banks would have to restrict new lending with loan-to-value ratios (LVRs) of more than 80 per cent to no more than 10 per cent of the dollar value of their new housing lending flows". http://www.stuff.co.nz/the-press/bus...rtgage-lending
Kiwi Bank have also signalled they will be allocating their high LVR loans towards first time buyers not investors.

Re: 20% deposit needed to buy a house from oct
 

Thank the lord we bought our house before these new rules started, I reckon we'd have gone home if we couldn't have bought an house.

Renting wasn't for us.

Re: 20% deposit needed to buy a house from oct
 

Conversely, it might help slow down the housing market making properties more affordable. That's what the Reserve Bank is hoping for, but I personally don't think that will happen. It depends a bit on where the investor buyers are really coming from. Local with a high mortgage or foreign with cash to invest.

On selfish grounds, if it leads to a housing crash that would be great for me. I can sell my UK property and buy a nice place here.

Re: 20% deposit needed to buy a house from oct
 

From what i've allegedly heard, Westpac and Kiwibank will not be complying with this. They'll still be open for the small deposits but you gotta have a good credit rating. That won't be a problem

The smaller deposits will still be around, just be more swayed allegedly to FTB's from October onwards.

Some people have been saying this may put investors off. If it means rental market decreases and rates go down, then good. Sadly I doubt this'll happen around Christchurch due to the housng shortage and floods of workers coming to help with the rebuild.

Re: 20% deposit needed to buy a house from oct
 

Ive spoken to a couple of mortgage brokers about this recently (having just taken out a mortgage, 95% one at that) Banks will continue to be officially free to give out whatever finance they want but, the percentage of LVR loans to other finance has been drastically reduced so its going to become much more difficult to secure these loans. Its already hard to find banks willing to give out loans over 90% (and those that do add on a pretty hefty low equity payment fee) so now its just going to become almost impossible. Kiwisaver and Welcome Home Loan changes will make a bit of a difference but these will now also require a 10% deposit rather than the 5% they do presently so again 10% is going to be the minimum.

These advisors don't believe this ruling will make any difference to the present issues in the housing market. Its not the first time buyers, the people asking for these high LVR loans, that are paying stupid amounts of money for property, its investors and second home buyers who already have the required deposits in place anyway. All its going to do is pretty much take the small percentage of first time buyers almost completely out of the market.

Re: 20% deposit needed to buy a house from oct
 

I suppose we'll have to see how this pans out in time.

Hopefully it'll result in keeping interest rates low.

Re: 20% deposit needed to buy a house from oct
 

its scary - maybe i'll spend my house deposit on a world trip - hellava lot more fun then a massive mortgage.

Re: 20% deposit needed to buy a house from oct
 

So if you have a decent deposit with this new info is it best to buy or wait in case prices start falling?

We are thinking about whether to buy or not and quite frankly it's giving me a headache, every time we come to a decision we hear something else that causes us to doubt again :(

Re: 20% deposit needed to buy a house from oct
 

I was about at the stage of spending mine on gin and shoes when my house turned up!

Re: 20% deposit needed to buy a house from oct
 

YES! GREAT NEWS! Now even more Kiwi's and regular skilled workers have a miniscule chance of ever being able to afford to buy their own house (unless they inherit serious cash).

Well done John Key, National voters will love you even more than before as only the rich and greedy can now buy. Homeowners must be so happy.

I am so over this $h1f - so my new approach is to stop caring and just enjoy renting and living here whilst it still happens. I will buy one day, just sadly its unlikely to ever be in NZ.

Anyone with any ounce of reality or sense currently residing in the UK and thinking of moving here full-time: FORGET IT unless you're rolling in it or wanting to come here on a long-holiday.

Re: 20% deposit needed to buy a house from oct
 

:thumbsup:I agree!!

Re: 20% deposit needed to buy a house from oct
 

I agree. This is not the country I grew up in. Too ****ing expensive.

Re: 20% deposit needed to buy a house from oct
 

It pains me to say it but it's hard to see why anyone would want to put themselves in the uncertainty that coming to NZ brings compared to Australia.

We have been here just over a year, moving from the North West of England. I travelled extensively as a young man & met many a Kiwi & Aussie. I loved the laid back Kiwi attitude & getting here was a landmark moment in our families life. I never thought of Australia until now.

I have a decent job & earn the median wage, my wife works part time which fits around the kids & their schooling.

But......there is no chance we'll ever be able to get on the property ladder, we're in our 40's & saving 10% was always going to be difficult. But now it's 20% & then meeting the repayments is impossible.

Why is NZ intent on breaking itself & it's people ? I've spent most of the last few days looking at the price of rents/mortgages in Melbourne & comparing these to the salaries on offer. To be honest it's a no brainer & staying here is a decision that is being rapidly taken out of my hands.

Re: 20% deposit needed to buy a house from oct
 

Great first post Dominic. You are right, if you have an aim of being a homeowner or any of that family/setting stuff (as well as needing to work) - NZ really isn't the place to be anymore. Sure- there will be the odd exception, i.e. you can get a job somewhere like Invercargill or the west coast where property is still affordable. But in reality, if you are skilled - 95% of people will end up in Auckland or WLG (or perhaps CHCH). In those areas its just too much. As you say, the country has already made the decision for many of us.

Can you further elaborate on your findings with regards to Melbourne?