From September 1st this year the Reserve Bank is going to put limits on how much investors can borrow. Their goal is to slow down the property market. They think that by preventing investors as well as owner occupiers from buying as many houses as they were able to before, they will achieve their goal. Loans to construct new buildings will be exempt.
* No more than 5 per cent of bank lending to residential property investors across New Zealand would be permitted with an LVR (loan-to-value ratio) of greater than 60 per cent (ie a deposit of less than 40 per cent).
* No more than 10 per cent of lending to owner-occupiers across New Zealand would be permitted with an LVR of greater than 80 per cent (ie a deposit of less than 20 per cent).