A property listings drought is adding further fuel to our over-heated property market. Property prices are increasing everywhere except Taranaki according to Trade Me Sales Price Index and that’s got the RBNZ considering further action to curb demand.
The RBNZ’s LVR restriction on Auckland property investors has done little to dampen their appetite and many have also moved their focus to other areas where property prices have been on the increase since October 2015.
The listings drought suggests most home owners are electing to improve their properties using the equity in their homes over moving house. Some Aucklanders have chosen to leave the city for change of lifestyle and Tauranga has been one of the main benefactors as well as the region of Hawkes Bay.
Curbing demand is how the RBNZ want to deal with the property market and they’re considering a variety of measures. Bernard Hickey in a news item on NZHerald believes we’ll know more on the RBNZ’s next move in the second half of 2016. Bernard mentions two dates in particular: 19 August is the deadline for Auckland Council to accept all or some or reject all the Unitary Plan. The Government is hinting at wading in if the Unitary Plan does not meet their goals of an Auckland growing up and out to meet new housing supply targets.
The other date to watch out for is 30 November. On this day the RBNZ presents it’s Financial Stability Report. One of the measures under consideration by the RBNZ is the fixing of the income to loan ratio.
From the news item on NZHerald
“The Reserve Bank helpfully included a chart in this week’s report that showed around 35 per cent of owner-occupiers and 60 per cent of investors had borrowed more than 5 times their income.”
New rules are coming and if what’s happened to date is anything to go by the RBNZ is not shy at taking action so keep these dates in your diary. No doubt investors are now very aware of their income to lending ratio and will be taken the necessary steps to survive the next round of RBNZ restrictions.
This blog article was written for PropertyBlogs by Mobilize Mail.