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Articles by Matthew Gilligan

New Reserve Bank Lending Rules for Five or More Rentals

AUTHOR: Matthew Gilligan

POSTED: 24 February 2014

Did everyone catch the NZ Reserve Bank announcement today that investors with five or more rental properties will be required to be treated commercially by banks?

Apparently we must be treated as small business owners in risk profile, and higher costs for credit paid. Higher interest rates and potentially lower LVR ratios are possible. This will reduce liquidity in the market more, on top of the 20% deposit rules already applied late last year. There is some speculation that it will be applied on a 5-property rule per bank, which would soften the impact for some.

This is rough stuff for property investors and will arguably tighten housing supply discouraging bigger investors to participate in construction of larger scale portfolios. It must further spook the market in the short run. But it will likely create some good buying opportunities on the flip side.

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Hi Matthew, Just like to thank you for a Great day on Sunday at at the Property Leaders event....certainly worth the trip up from Wellington. We are always impressed with GRA's ability to help their clients.. a rarity among many businesses. Kindest regards, Brian and Janet Adams - Brian and Janet Adams, May 2018

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