Not exactly a surprise, after all the Reserve Bank wanted to curb the housing market, if loan queries are down that means there will be a softening of certain markets.
Will it soften the market that the Reserve Bank really wants to slow down though? I don’t think so, the drivers in that market are not related to the access of money but rather supply and demand, people still need homes and so if they do not buy them they will rent them which means the buyers will end up being investors instead of owner occupiers.
Is this an opportunity for Real Estate investors? I think so. You watch rents start to soar.
Banks say inquiry levels for those wanting to borrow money to buy a home have plummeted since the Reserve Bank’s clampdown on low-deposit lending, leaving them scurrying to remind the public they are still open for business.
On October 1 the Reserve Bank introduced a 10 per cent cap for all new lending to those with a deposit of less than 20 per cent.
The banks must meet the requirements or face losing their licence to operate.
Figures released by the Reserve Bank show the percentage of new lending where the borrower has equity of less than 20 per cent has fallen from 26.5 per cent in September to 12.8 per cent in October.
Excluding exemptions, such as Housing New Zealand’s Welcome Home Loans scheme, the lending fell to 11.7 per cent.
via Simply Mortgages | Home loan queries dive.