ANZ to increase required deposit for investors to 30%

AUCKLAND: A second major bank says it will increase the deposit requirements for investors to buy property from 20% to 30%.

ANZ, New Zealand’s largest bank, will bring in the higher deposit rate from December 7, which follows rival bank ASB announcing on Thursday it would immediately increase the requirement to 30% for investors.

On Wednesday the Reserve Bank said it would consult on bringing loan to value ratio restrictions (LVRs) back from March 1.

LVRs restrict how much banks can lend to low deposit borrowers.

It dropped the LVRs in May for a year to ensure banks could go ahead with the mortgage deferral scheme put in place because of the Covid19 pandemic and to ensure credit kept flowing into the market.

Ben Kelleher, ANZ NZ managing director personal, said the bank had been closely monitoring the impact of low interest rates and reduced LVR requirements on the residential property market.

‘‘It’s in everyone’s interests for residential property prices to be sustainable long term, and for home ownership to be accessible to as many Kiwis as possible.’’

Mr Kelleher said in October, which was a record home lending month for ANZ, 31% of its home loan commitments were to property investors, while 19% was to first home buyers.

Other banks have yet to bring in a hard line increase to deposit requirements for investors.

A Kiwibank spokeswoman said it would be ‘‘acting in the spirit of the Reserve Bank’s direction while ensuring customers can appropriately transition to the new environment’’.

A BNZ spokesman said its price and credit settings remained under regular review but it had no changes to announce at the moment.

Westpac NZ general manager of consumer banking and wealth Gina Dellabarca said it never changed its lending settings, and they remained in line with previous LVR rules.

‘‘We have remained open for business across all segments and have grown our support for housing, agri and business customers over the past year.’’

Under the previous LVR rules banks were only able to do 5%of new lending to investors with a deposit of under 30%. — The

New Zealand Herald