Higher loan rates for property investors is now a reality in Australia. A couple of banks (ANZ, CBA) have recently raised their home loan rates for investors. The residential property market is also hot in the UK – so it’s not just an Auckland thing. A garage sold for $2m in London recently and the median house price in Sydney is now over $1m.
Foreign Buyers are investing in residential property in Sydney, London and Auckland. There are rules in place however all leaders admit more needs to be done to tackle the dirty money in property. The purchasing of luxury properties for cash is a concern for UK Prime Minister David Cameron who vows to fight the money laundering in the property sector.
Australia and the UK have a stamp duty, and a capital gains tax however neither have had much of an effect on the growth in property prices hence more action being taken. New Zealand has considered all sorts of measures for the Auckland property market with the RBNZ and the Government implementing restrictions – however some of them do not take effect until later this year.
A specific home loan interest rate for property investors is not a fait accompli however it’s not off the table either. It’s implementation by some or all of the major lenders will probably depend on the effect the restrictions have on property prices.
In the NZ Herald article:
ASB head of home lending Vince Clark said the bank was aware of the Australian developments and its interest rates were subject to regular review.
The RBNZ [Reserve Bank] has issued proposals in regard to investor lending and we will evaluate the final outcomes in due course, Clark said.
Kris Pedersen Mortgages suggest investors review their loans regularly and be thorough in assessing the viability of property deals. Irrespective of the low interest rates servicing of loans is calculated on a higher rate.
This blog article was written for PropertyBlogs by Mobilize Mail.