Loan

Auckland house prices drop. Wait for Labour to declare a crisis in market confidence

Nick Smith does stuff all that is useful, but there is a glimmer of hope from latest house price statistics.

House prices may be starting to drop in Auckland – but it’s too soon to tell if the latest data shows a trend.

The new mortgage lending restrictions introduced by the Reserve Bank officially kicked in on October 1, but most of the main banks had already been introducing them over the previous couple of months.

Interest.co.nz’s regional Home Loan Affordability Reports for September showed the new loan-to-value-ratio mortgage lending restrictions on residential investment properties may be impacting house prices in Auckland. ? Read more »

No need for government action, the market has solved it

All too often people expect the government to solve problems, if there even is a problem.

Generally they are useless at doing anything of the sort, except if it comes to collecting taxes.

People have been clamouring for the government to DO something about foreign buyers of real estate.

Today the market solved the problem for them….if it actually is a problem. I’ve never ever heard of a bank turning away profitable business. I suspect there is not problem at all which means the banks can safely decide not to do it.

Westpac and ANZ will no longer lend to overseas-based buyers of New Zealand property – with other banks expected to follow the move to shut the door on foreign investors.

The restrictions follow moves by Australian banks to stop lending to foreign buyers of property.

Westpac New Zealand has announced that from today it will no longer lend to non-resident borrowers with overseas income.

Borrowers on temporary resident visas will only be accepted if they have both a New Zealand address and a New Zealand-based income.

ANZ has also announced restrictions that will effectively shut out most non-resident, overseas-based borrowers, including restricting lending to owner-occupied properties.

Read more »

See what happens when you enforce the rules…compliance increases

No surprises here that after the arrest of student loan defaulter has resulted in increased compliance.

The border arrest of a man over his student-loan debt has contributed to a surge in repayments, Inland Revenue says – with emails and phone calls from borrowers up by more than 50 per cent.

About 20 people who have defaulted on their student loans are being monitored for possible arrest if they return to New Zealand.

In January, Cook Islands man Ngatokotoru Puna, 40, was arrested as he tried to leave New Zealand.

Student unions criticised the border arrest policy as draconian and likely to make overseas Kiwis “student-loan refugees” – unable to return home for weddings, funerals or other important events.

Over the first two months of this year there was a 31 per cent increase in repayments by overseas-based borrowers, compared to the same period last year, with $7 million more received.

Emails to IRD were up 62 per cent, and phone calls increased by 55 per cent.

Read more »

Who the hell cares who owns the home you’re living in?

A news paper editorial was probably written by a bitter inner city lefty with a tinge of jealously.

This week the Reserve Bank released the sort of data on mortgage lending that we have not previously seen. It revealed banks have made three times as many loans to investors as they did to first-home buyers in the past year, and the average amount lent to investors was larger. The figures may not have surprised anyone who has attended house auctions in Auckland but they are hard evidence of what has undoubtedly been happening for a long time.

Nobody should listen any longer to the suggestion that all would be fine if Auckland’s house building matched its population growth. Certainly the city needs to increase its rate of new house building but when three houses out of four are being bought by investors in rental properties, it is going to take more than the country’s capacity to boost supply if New Zealand is again to give all young people a chance to own a home.

Would these be the same young people who have no qualms at all in dropping thousands of dollars on an OE and come home penniless and are now moaning about not being able to buy a house with no deposit because they pissed it away rooting their way around Europe? ? Read more »

Hard line on student loans working

The government’s hard line on student loans appears to be working:

Overseas student loan holders have been rushing to get in touch with the Inland Revenue Department and restart their loan payments since the Government introduced sanctions for serious defaulters such as power to arrest at the border.

Revenue Minister Peter Dunne told a select committee yesterday that new measures had been successful in getting more overseas students to contact IRD and in some cases arrange to begin repaying their debt.? Read more »

Bob Jones on the Loan Cry Babies and the woeful DomPost

Bob Jones writes about the loan cry babies?we discussed last week.

Wellington’s daily newspaper, the?Dominion Post, has acquired a risible reputation for its sometimes ludicrous front pages. On its current form, if World War III broke out, it would play second fiddle to a blaring front-page account of a cat up a tree.

The?Dom, as it’s colloquially known, plumbed the depths last year with a ridiculously over-the-top full-page photograph of a Queen’s Counsel caught driving over the limit; justifiable treatment only if he’d won the Nobel Prize or climbed Everest naked.

Heh, perhaps the editor has stopped taking his calls.? Read more »

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