21/10/2021
Long time no posts!
A crazy time in the world of finance at present. Aside from the dreaded 🦠 that seems to keep us working from home!… not an ideal set up, multiple simultaneous zoom meetings is definitely more than my households wifi can cope with!
A long overdue update on some recent changes :
Consumer Credit Contract Finance Act changes coming into play and prompting required policy changes for all banks to be rolled out. More info required, more detail, more adviser educating clients to ensure all is fully understood. More forward planning , more exit planning - the option to retire with a mortgage will be limited unless you have a supplementary or passive income. These changes all tie into the Responsible Lending act.
Kainga Ora have a new offering to assist first home buyers. “First Home Partner” will be a step up allowing those with a deposit and reasonable incomes and good credit history to bridge the gap and potentially purchase a new build home. Kaingaora offer capital in exchange for a percentage of ownership of the house, this additional debt of up to 25% purchase price ( capped at $200k) has to be repaid within 15 years. Bank criteria will also need to be met.
The Reserve Bank speed bumps are definitely giving us all a bumpy ride as banks desperately try to align their existing low deposit approvals & lending to below the lowered tolerance level of 10% announced by the Reserve Bank. This has added to the congestion in bank land. New builds are an exemption to this LVR rule.
Changes to high density rules… up to three townhouses 3 stories high will be allowed on sections, 50% ground coverage and no allowance for parking necessary. One would assume anywhere on a transport route within cities will be considered. This is significant- developers will feast. Heritage areas and coastal will be preserved. Hopefully existing off plan developments will not be scrapped to capitalise on this! It will keep viable section prices firm, expect quality relocatable houses to be coming to market to clear the way. The reserve bank LVR exemption coupled with appealing new build bank offerings already has heat on this area of the real estate market.
Investors seem to have taken a back seat in the main centres at present, high prices coupled with tax and capital gains disincentives has taken the wind out of the Ma & Pa investors. Speed bumps also impacted here with limited lending available to those with less than 40% deposit (unless a new build)
Tipsof the day, whilst you may be celebrating the increase in value of your property please take a moment to review your house insurance… ( no I don’t do house insurance) but if the worst happened the old cover you have in place may only stretch to a tiny home budget rebuild.😱
If your making an offer on a property please allow 15days for finance clause, banks and valuers are under duress and struggling to meet the old 10 day deadlines.
Take care and please flick me an email if I can be of help…
