M_and_M

I'm reading today in the Southland times, that there are new reserve bank measure possibly coming into place that will make it even more close to impossible for new house buyers.

On 1 October the new 20% deposit rule comes in. (We were just 24 hours inside the time frame for getting a 95% mortgage approved, as banks are bringing this in already)

Now they want to also offset loans and credit cards against mortgage applications, meaning those with other finance owed elsewhere will need an even bigger deposit.

I'm not sure what their motives are but won't it stagnate the housing market? That's proposerous!

dannigirl

Aside from Auckland and Chch the rest of NZ is not in a bubble! I think it is sensible to take into consideration other debt when you purchase a house, people forget you have to service a mortgage. What we need is more affordable, healthy homes. The sooner Aucklanders accept they need to go up instead of out, and more housing is built and/or more emphasis is done on attracting people to other cities/provinces, the better.

I personally don't even agree with 95% mortgages, unless intense financial scrutiny is undertaken, however I appreciate people need these to get onto the ladder. I just worry about our low wage economy and high LTV mortgages and it all falling down.

ExKiwilass

there needs to be a big culture shift to living in highrise/townhouse complexes. My sister (aucklander) said people who move to AKL from the provinces don't understand how to live in multi-family buildings. They think they can still do what they want - build a fence, knock down a wall etc without considering the whole building/ neighbours. Sounds like a nightmare with relatively weak laws to protect others because living this way is still so new to NZ.

I should point out she was talking about kiwis though, not immigrants.

jmh

Having a close eye on the Auckland market at the moment, there seems to be no shortage of high rise apartments at reasonable prices in or near the CBD. Of course, many people don't move to Auckland to live in a flat on the 6th floor. My gripe is that many of the new builds (lots going up out East and South) are large four-six bedroom houses. While out East there are some terraces/townhouses etc (i.e. more affordable), we need to see more of these as starter homes for people.

I'm not completely anti the mortgage changes, but it won't cool the market which is the intention.

BEVS

I thought this already happened. It did for us.

davros1984

Think most of us have given up now.

I went for a walk yesterday around the area in which I live. (Arse end of the N. Shore). There was an open-home on the go as we were walking back towards our house. It was a tiny 2-bed unit, asked the agent what the CV was - $325K. Although she has already had a pre-auction offer in the region of $370K. Fully expects it to go for 400K+.

I would quite happily live in a semi-detached or terraced house (assuming it was well built, modern and preferably brick). Kiwi's do in general seem to hate the idea of semi-detached or terraced housing. They want their big sections!

Competely agree with dannigirl and exkiwilass' comments above.

Tom1983

I see ASB have withdrawn any mortgage offer that they made to customers that don't satisfy the new requirements from the reserve bank

Charismatic

I just read this as well. Have they actually gone mental?

We've known this was round the corner for a while now, you don't just pull the carpet out from under peoples feet. Why would they do this? They can write 10% of their mortgages over 80% LVR and they get six months to phase this in, why panic now when they have plenty of time? If they just stopped (or actually reduced significantly) doing pre-approvals for over 80% on the 4th of October they could cruise home within the 6 months because all their pre-approvals would be used or run out of time.

Can anyone explain the rational?

Bo-Jangles

The real problem is that most of those big new houses are built on a one by one basis and new builds are not put up on spec and available to the market in the way that they would be in the UK. Most are sold as land and build packages and built to the requirements of the people buying them rather than the other way round.

There are large swathes of scruffy unfinished housing 'estates' and roads around Albany that look a bit like Beirut; where there are ugly bare sections among the swanky palaces. Some roads around there are still looking like building sites, some eight years or more after the first houses went up.

lisamct

Yep, it happened for me too. I was lucky enough to sneak my mortgage in a few weeks before the new rules came into force but both my existing credit cards and car finance were taken into consideration when looking at my finance and both had to be paid off as a condition of me getting a home loan.