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.
We just want to say that with these being the first set of accounts to be prepared for us by GRA, we are very happy with the outcome, and really feel like we are getting the support, guidance and advice that we have spent many years looking for, but only found with yourself and GRA, so thank you for that. We are very happy with the property focus and resources available with GRA to help us move ahead with our Property investment goals too.
- Mike and Annalise, November 2020
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