New Reserve Bank Lending Rules for Five or More Rentals
POSTED:
GRA Blogs
Articles by Matthew Gilligan
Did everyone catch the NZ Reserve Bank announcement today that investors with 5 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 will likely create some good buying opportunities on the flip side.
You can read the full report New Reserve Bank Lending Rules mainly paragraphs 31-37.
Matthew Gilligan
Director
© Gilligan Rowe & Associates LP
Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.
Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.
Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
Testimonials
The volume of detailed information we were given was awesome. More options than I ever imagined. I enjoyed every session - Colleen E - December 2017
Gilligan Rowe and Associates is a chartered accounting firm specialising in property, asset planning, legal structures, taxation and compliance.
We help new, small and medium property investors become long-term successful investors through our education programmes and property portfolio planning advice. With our deep knowledge and experience, we have assisted hundreds of clients build wealth through property investment.
Learn More
