NZ Herald business editor at large

ASB joins other banks to restrict foreign home buyer

ASB is the fourth major bank to cease lending to foreign home buyers. Photo / Getty Images
ASB is the fourth major bank to cease lending to foreign home buyers. Photo / Getty Images

ASB has followed Westpac, ANZ and the BNZ and will cease lending to foreign house buyers.

In a statement this afternoon ASB said: "Overseas income will no longer be considered in applications where the customer does not hold New Zealand citizenship or permanent residency. Where a customer does hold New Zealand citizenship or permanent residency, we will consider overseas income on a case-by-case basis subject to certain conditions."

The move follows the lead of ANZ and Westpac last Thursday and BNZ on Friday.

Westpac New Zealand has said borrowers on temporary resident visas will only be accepted if they have both a New Zealand address and New Zealand-based income.

ANZ has also announced rules that will effectively shut out foreign borrowers, including restricting lending to owner-occupied properties.

The moves follow similar restrictions introduced by the parent companies of the big four banks across the Tasman.

They come as the Reserve Bank considers further regulatory measures to try and dampen Auckland's red hot housing market - including the possible introduction of debt-to-income ratios - which require banks to have accurate information about the income of those they lend to.

It is understood that the banks in Australia have not felt comfortable with the accuracy of some of the income information they get from foreign investors.

ASB's move leaves government owned Kiwibank as the last major bank still lending to foreign investors.

Spokesman Bruce Thompson said it had not been a significant area of lending for Kiwibank and while "the door was still open" the bank was reviewing its policy to ensure it was appropriate for current conditions.

- NZ Herald

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