Property asking prices in the provinces grew by a higher percentage than properties in Auckland. According to Trade Me Sales Price Index for October 2015 asking prices in Auckland increased by 2 percent compared to 3.8 percent in the provinces.
The imposed RBNZ 30 percent LVR restriction on Auckland properties for investment and the Government’s Bright Line test are probably responsible for the pull back in percentage growth of property sales asking prices. However Auckland’s property values are still growing much faster than anywhere else in New Zealand and unless the growth in asking prices is pulled back further more restrictions are likely.
Maybe the RBNZ will take a leaf out of the Bank of England’s book?
“The Bank of England has today announced new limits on mortgage lending to keep rising house prices in check and prevent borrowers from taking on too much debt.”
“Mortgage lenders will not be able to lend more than 15pc of their total new residential mortgages at loan-to-income ratios of 4.5 times or above.
The limit will apply to the number of mortgages completed, rather than their total value, from October 1.”
Kris Pedersen of Kris Pedersen Mortgages says more restrictions are a given at some stage in the future if Auckland property values continue to rise at the current pace. We recommend borrowers review their loans regularly so they are structured to meet their personal financial position.
This blog article was written for PropertyBlogs by Mobilize Mail.