LVR Restrictions Removed for 12 months

Since October 2013 LVR restrictions have been in place when purchasing a property, but no more! Yesterday on the 30th April, the Reserve Bank announced their decision to remove LVR restrictions for 12 months.


All locally incorporated banks who responded during the week long submission period were in favour of removing LVR restrictions, believing it will allow them to support customers through the impact of Covid-19.


However, views from other submissions varied, with some voicing concerns about potential adverse impacts on financial stability, such as the risk of bank failure. Also noting that with the economy weakening and job security reduced, the ability of people to service a mortgage will likely decline in the coming months.


In response to this, the Deputy Governor and General Manager of Financial Stability Geoff Bascan has said “given the current uncertainty around the economic outlook, the Reserve Bank considers that it is unlikely that banks will weaken lending standards to high risk borrowers. The more likely risk is that banks are overly cautious with lending to credit-worthy borrowers."


The decision is effective as of 1 May 2020. The change will be made via a change in bank Conditions of Registration.


However the decision will be reviewed in 12 months, with Bascan stating that “the Reserve Bank will monitor lending activity and feedback from retail banks over the next 12 months as the economic impact of the COVID-19 pandemic becomes clearer. While we’ve eased the restrictions completely for the next twelve months, we will review the most appropriate setting for LVRs in a year’s time".


Great news for those wanting to expand their portfolio.


If you have your eye on another investment, get in touch with us. Receive a no-obligation, FREE rental appraisal today for your Wellington investment property!

Call Jordan Atkinson - 027 297 0873

Quinovic Kent Terrace | Wellington


Call Allan Hartley - 027 522 9084

Quinovic Johnsonville | Wellington

Call Helen Vance - 027 487 8103

Quinovic Hutt Valley | Wellington

Get the latest news for landlords

Get a Free Rental Appraisal

Free and no-obligation! Receive a detailed report on the earning potential of your investment property.

Call Allan Hartley Today

Quinovic Johnsonville & Northern Suburbs

027 522 9084 or email me

Call Jordan Atkinson Today

Quinovic Kent Terrace Wellington

027 297 0873 or email me

Follow us: 

Facebook
Linkedin

Newsletter

Receive latest investor news straight to your inbox. Sign Up

Call Helen Vance Today

Quinovic Hutt Valley

027 487 8103 or email me

© Quinovic Kent Terrace, Johnsonville and Hutt Valley Wellington Property Management 1988-2020. Privacy Policy