Investors urge banks not to follow ASB in restricting loans for new builds

by Duffie Osental18 Feb 2021

Property investors have urged banks not to follow ASB’s move to require a 40% deposit for loans for the construction of new dwellings.

From March 01, the reinstatement of loan-to-value ratio (LVR) restrictions will see 30% minimum deposit requirements for most property investors – and from May 01, that requirement will rise to 40%.

Read more: Industry weighs in on LVR reinstatement

However, the Reserve Bank of New Zealand (RBNZ) said that loans to owner-occupiers and property investors are exempt from the requirement, provided that borrowers “either commit to the purchase at an early stage of construction or be buying the residence (within six months of completion) from the developer.”

Despite this, ASB announced that it will still require a 40% deposit from property investors for newly constructed homes – a move Sharon Cullwick, executive officer for the NZ Property Investors’ Federation, urged other banks not to follow.

Cullwick told that banks “should not prevent money flowing into the supply of new properties, which were needed to help tackle the housing crisis.”

“We have to keep things moving along,” Cullwick told “We need to increase housing supply.”

According to, other banks have indicated that they will continue to lend to investors at lower LVRs for newly constructed dwellings – including Kiwibank and ANZ.

“The Reserve Bank has outlined a list of lending types that are exempt from the LVR restrictions which Kiwibank continues to offer, including new builds,” Kara Tait, a spokesperson for Kiwibank, told “By enabling more new builds/construction loans Kiwibank is supporting more New Zealanders into homes, as well as adding to our housing stock.”

For its part, ANZ spokesman Stefan Herrick told that “in line with the Reserve Bank’s exemption criteria, we do allow construction lending for investors with less than a 40% deposit.”

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