Bank of New Zealand (BNZ) will reintroduce its pre-COVID-19 home lending loan-to-value ratio (LVR) in December, ahead of the Reserve Bank of New Zealand (RBNZ)’s plans to reintroduce LVR restrictions.
The RBNZ plans to reinstate LVR restrictions in early 2021. However, BNZ has decided to reintroduce its pre-COVID-19 LVR settings on December 07, requiring a minimum of 30% deposit from residential property investors.
“Given the importance of ensuring homeownership remains within reach for New Zealanders and that residential property prices remain sustainable, we believe the right thing to do is to move back to our pre-COVID-19 loan-to-value settings,” said Dan Huggins, the executive for customer, products, and services at BNZ.
ANZ also recently decided to reintroduce LVR restrictions on investors. It confirmed that the minimum deposit required from property investors will increase from 20% to 30%, with pre-approvals unaffected.
“COVID-19 has made the housing market and lending decisions more complex, and we believe that any step we can take to increase balance and sustainability in the market is the right thing to do,” said ANZ managing director of personal business Ben Kelleher, as reported by RNZ.