New Zealand Mortgages & Securities (NZMS) is confident that Auckland will survive the COVID-29 crisis as demand for affordable housing remains solid. As a result, it decided to offer $74 million for residential development in the region.
James Kellow, the director of NZMS, said the NZMS could address any economic fall-out from the pandemic because it has plenty of capital for viable projects.
“In fact, we expect the quantum of our lending in the next couple of years will mirror the past few,” Kellow said.
“We’ve received $50.3 million in recent repayments from successfully completed projects and have a further $127.5 million due in from projects near completion. This means we're ready to fund new projects and remain very confident despite current global circumstances.”
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The NZMS sees a bright future for Auckland despite the COVID-19 crisis because it had already proven its resilience during the global financial crisis (GFS), and well-designed and well-situated residential developments will always sell.
“Many lenders struggled with loan recoveries in GFC, but these were almost all in provincial areas. It is the critical mass of people living in Auckland that provides depth to the market and ongoing demand for better living environments,” Kellow said.
He added that record-low interest rates and the removal of loan-to-value ratio (LVR) restrictions allow first-home buyers to purchase a property with a lower deposit.
“We always get a kick out of delivering well-designed projects, but providing funding to projects for first-home buyers is extra rewarding. We have done some developments with KiwiBuild, and we are very proud of the fact that all to date have been matched with first-home buyers prior to completion,” he said.