A potential first home buyer talks us through what these changes could mean for her.
Bailey Ghorst – First home buyer
Auckland first-home buyer Bailey Ghorst, 31, says changes making it easier to get a bank loan are "great news" but still don't go far enough to help her get a foot on the property ladder.
Banking restrictions introduced in 2013 mean most owner-occupiers mustraise a 20 per cent deposit before they can access a home loan.
This restriction will continue, except that – from January – banks will be allowed to make more exceptions to the rule.
Bailey Ghorst says it is near impossible for her to raise a deposit for an Auckland property on her own. Photo / Doug Sherring
It will permit banks to offer home loans to up to 20 per cent of customers with deposits less than 20 per cent.
On paper that should benefit Ghorst. She is set to work in Albany next year and wants to buy a home in the North Shore where she said most entry level homes cost $750,000.
She earlier spent eight years living overseas in countries, such as Botswana, Tanzania and South Africa.
"These were amazing, incredible life experiences, but it meant I didn't save as much as I otherwise would," she said.
"And when I came back to New Zealand in 2015, I was just priced out of the market completely."
Ghorst – who is keen to buy a home in Auckland she can live in – then spent a year house sitting so she could save on rent and is now considering moving in with her parents to continue saving.
But despite earning a good salary as a marketing manager, she said it was near impossible to save enough money for a 20 per cent deposit.
"I know that my circumstance isn't unique. There are a lot of people in the same position for whom saving a 20 per cent deposit isn't realistic," she said.
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Unable to raise the 20 per cent deposit on a $750,000 North Shore house, she instead plans to buy her first home in partnership with another woman so they can together afford the costs.
Leone Van Niekerk - Property Investor
Auckland property investor Leone Van Niekerk, 35, has welcomed changes making it easier to get a bank loan but says they don't go far enough.
Banking restrictions introduced in 2013 had made it harder for investors by requiring them to raise a deposit equal to at least 35 per cent of the value of their home loan. But from January this will now be eased to allow banks to led to investors who have 30 per cent deposits.
The marginal change in loan to value restrictions will help Van Niekerk but she had hoped for better.
Property investor Leone Van Niekerk says the easing of lending restrictions is a start but wishes more would be done to help investors. Photo / Doug Sherring
She and her partner, who is a teacher, spent three years saving for their first deposit while also pulling money out of their KiwiSaver accounts.
They then bought the Auckland home they live in five years ago before buying their first investment property in Tauranga last year for about $480,000.
But the high deposits they must leave locked up in each bank loan has made it near impossible to buy again near Auckland and hard to buy elsewhere in the country, she said.
With so many people looking for rental properties, she believes more should be done to support investors.
"It's been a struggle, which is a shame because we are actually able to provide people with proper, decent rental places," she said.
"And like any investor, we are looking for people to stay long term."
Upon hearing the loan to value restrictions were likely to be eased, Van Niekerk said she contacted her broker to check out their financial position.
She and her partner are keen to invest again as soon as possible and are interested in buying a home worth more than $500,000 in areas, such as Dunedin, Blenheim or Picton.
She said that once you are willing to pay more than $500,000 you are able to get good quality homes in the regions that need less maintenance and upkeep.
"What I'm really trying to invest for is my old age. I want to be secure when I get older," she said.
