Dampening highly geared speculators' appetite for the Auckland cash-box housing market got the thumbs up from many quarters yesterday.
Housing market naysayer Shamubeel Eaqub expressed delight at Reserve Bank moves against the less well-funded landlords with the new 30 per cent loan to value ratio regime from October 1.
Last year, using CoreLogic data, the NZIER principal economist pointed out the astonishing fact that investors made up 45 per cent of the house sale market. First-home buyers were reduced to a sad, pathetic 19 per cent.
"The RBNZ decision today highlights where the current pressure on house prices is coming from: speculative buying by people betting house prices can only go up," Eaqub said.
"The pressures are really only on Auckland. The fact that the RBNZ has specifically ring-fenced Auckland and eased restrictions elsewhere respects the two-speed nature of New Zealand. The RBNZ has shown that policy making for New Zealand does not have to be held to ransom by Auckland house prices."
Westpac's Dominick Stephens and Michael Gordon noted how the RB estimated new restrictions could cut Auckland house price growth by 2 to 4 per cent. But they pondered the delaying of implementation until October 1.
"It's likely that the aim of announcing this so far ahead of the implementation date was to create an immediate chilling effect on the Auckland property market," they say. "Whether that proves to be the case over the next four and a half months is unclear. When the first LVR limits were announced in 2013, house prices surged as buyers, particularly first-time buyers, rushed for the door before it closed on them."
Even Mayor Len Brown clambered aboard to welcome the restrictions.
"The initiative targets one of the main sources of the issues facing the Auckland housing market and sends an important message while complementing what Auckland Council and the Government are working to achieve through the Auckland Housing Accord and other initiatives," Brown said.
David Whitburn, Auckland Property Investors Association immediate past president, noted how new-builds were unaffected by the 30 per cent landlord LVR and praised this.
The ex-lawyer-turned-investor said the restrictions only apply to existing places which might boost residential construction.
"The distinction between older and new houses is an important one to note, as investors play an important role in purchasing new builds to provide the crucial supply to address the massive shortfall in the number of dwellings Auckland needs.
"This move will focus investors on buying new properties, much like first home owners are favouring new builds in the Auckland region," Whitburn said.
Andrew King, NZ Property Investors Federation executive officer, seemed to be the angriest.
"This is going to hurt tenants and there is actually a shortage of rental property in Auckland," King said, forecasting rent rises which Whitburn backed up, saying 3.5 per cent current annual Auckland rent rises could go as high at 5 per cent.
Perhaps one of the most interesting points to emerge yesterday was RB governor Graeme Wheeler's acknowledgment that it would be "helpful" if information on non-resident New Zealand house buyers was collected.