New Zealand Banks shut out foreign buyers – NZ Herald Reports

Westpac and ANZ have made a decision to no longer lend to overseas-based buyers of New Zealand property. Other banks are also 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.

Labour’s Finance spokesperson Grant Robertson said the restrictions showed the banks acknowledged both that the housing market was “out of control”, and that overseas buyers were playing a big role in that.

“It’s the goal of a bank to make money from mortgage lending. If they are pulling back from lending on New Zealand housing, then there really is a crisis in the market.”

The moves come as the Reserve Bank today left the official cash rate at 2.25 per cent, with Governor Graeme Wheeler flagging rising house prices as a risk to the country’s financial stability.

Wheeler said investors could soon be targeted by new Loan to Value lending rules. He could not give detail on how restrictive any new LVR rules could be.

“We are still doing analysis. We would hope to be in a position by the end of the year to have made a decision on that. It could be earlier,” Wheeler told a Parliamentary select committee today.
Source – NZ Herald