New Zealand / Business

ANZ tightens lending to property investors to help 'bring balance' to property market

15:28 pm on 15 December 2020

The country's biggest bank is tightening lending to property investors.

Photo: RNZ / Nate McKinnon

ANZ says it will now require residential property investors to have at least a 40 percent deposit, up from from the current 30 percent.

There are no changes to deposit requirements for other residential buyers, including first home owners.

ANZ managing director personal Ben Kelleher said the current rules favoured investors over first home buyers, and the change is a way to bring some balance back into the market.

"Escalating property prices are putting home ownership out of reach for many Kiwis. The current settings favour property investors particularly over first home buyers, potentially locking a generation of New Zealanders out of home ownership."

He said over the past two months there had been record property lending with investors taken 32 percent compared to 18 percent for first home buyers.

"It's in everyone's interests for residential property prices to be sustainable long term, and for home ownership to be accessible to as many people as possible.

"As New Zealand's largest home lender, decreasing the LVR on residential investor lending is one thing we can do to help bring balance to the residential property market," Kelleher said.

Prime Minister Jacinda Ardern endorsed ANZ's move, describing it as beneficial. Ardern said she wanted first home buyers to be able to get on the property ladder.

She said the government would make announcements in the New Year on ways to improve housing affordability.

The Reserve Bank plans to reimpose loan-to-value ratios next March, and Kelleher said ANZ will suggest the deposit rate for investors be raised.

Photo: RNZ / Nate McKinnon

According to the Real Estate Institute, house prices hit a record national median of $749,000 in November - 18 percent higher than the same month the year before. The volume of properties sold was up 29.6 percent year-on-year, the REINZ said.