Barry Soper: LVR tweak is nice but you still need a $170,000 deposit in Auckland

Lock your doors - first-home buyers will be rushing to break them down with an offer that you no doubt can refuse.

Other than telling us our Aussie trading banks are in pretty good shape, which given their eye watering profits will come as no surprise, the Reserve Bank's tweaked what they're allowed to lend to you to buy a house or two which they seem to believe will help to rekindle the flat market which just a few months ago was running riot.

The central bank knows that its blunt tool introduced four years ago - the loan to value ratios (LVRs) - where first-home buyers have to stump up with 20 percent of what their dream house is worth, with investors required to cough up 40 percent, is like turning around an ocean liner.

As house prices ran out of control, so did the enthusiasm to buy them. It was like a mad rush to get into the stock market before it crashed with little thought being given to the possibility that an overstretched mortgage could end up being worth more than the house itself.

Fortunately that hasn't happened because most houses have simply changed hands as owners have upgraded.

It's left first-home buyers at the mail box with little chance of putting a foot in the door.
As the rules currently stand, they're unlikely to even make it up the pathway. Trying to scrape together a 20 percent deposit, while paying rent, electricity, or for the groceries and the petrol to get them at the supermarket - let alone having a bit left over for life itself - is beyond the reach of the vast majority.

How long would it take you to save more than a hundred grand to get into a house, worth on average half a million, or the $170,000 it'd cost you to cross the threshold in Auckland? Chances are by the time you've saved enough for the deposit, the goalposts would have shifted yet again.

Given the wall they're running into, the brick and mortar enthusiasm's not surprisingly been waning with banks not even making their allowable targets of lending to the sub 20 percent depositors.

The latest announcement allows them to increase their lending to those who fall short from 10 to 15 percent of their loans for new mortgages, but that loan book's only running at about eight percent as it is, with one of the big four lending next to nothing to those with less than 20 percent of the property's value.

But listen to the new purse string puller Grant Roberston and help is on its way - 100,000 affordable homes being knocked up over the next 10 years and a crackdown on speculators, will do the trick he says.

About as likely as the billion trees being planted over the same time. By then though we'll at least have enough timber, even if we don't have enough tradesmen to build them.