All four of the major banks have begun to apply new lending restrictions to home loans - six weeks ahead of the Reserve Bank's official September deadline.

Earlier this week the central bank announced plans to introduce new bank conditions requiring most loans to residential property investors to have a minimum 40 per cent deposit.

Most lending to owner occupiers would also require a 20 per cent minimum deposit with both changes rolled out across New Zealand.

While the deadline for the changes is September 1 the Reserve Bank said it expected banks to follow the spirit of the new regulations immediately.


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Westpac was the first to move announcing on Wednesday that from 4.30pm it would not take new loan applications, beyond the revised 60 per cent LVR restriction, from property investors while those with pre-approvals would "still be assessed as per the usual process".

ANZ, ASB and BNZ have followed suit today.

ANZ said it intended to honour all existing pre-approvals but would now apply a maximum loan to value ratio of 85 per cent for all owner-occupied home lending across the country and a maximum loan to value ratio of 60 per cent for investors across the country.

A statement from ASB said it would no longer provide new approvals for lending with an loan to value ratio greater than 60 per cent that is solely secured by non-owner-occupied residential properties from today.

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But existing approvals and pre-approvals greater than 60 per cent LVR issued before July 21 would be honoured until their documented expiry date.

BNZ said the September 1 rule changes would apply for all new lending from today but it had yet to decide what would happen with pre-approvals.

"We are hoping to have a decision by the end of today," a spokeswoman said.


Yesterday ANZ bank chief executive David Hisco said property prices in Auckland were over-cooked and the ending of the property boom will be "messy".

He warned baby boomers who have become property investors are starting to see more and more rentals where the owner can't find a tenant or the rent doesn't cover the mortgage.

He said "it's a matter of when, not if, the market adjusts".

Hisco said the central bank needs to go further and demand 60 percent deposits, which "will be unpopular amongst investors but it may end up doing them a favour" and mean less business for the banks.

Other banks have declined to comment on Hisco's view.

A Westpac spokeswoman said it did not intend to make any further comments other than its statement on the lending changes which it had released before Hisco's view came out.

ASB said it was unable to respond to Hisco's comments as its chief executive Barbara Chapman was out of the country on leave.

But BNZ managing director Anthony Healy said there was no one solution when it came to addressing the Auckland housing crisis.

"A shortage of housing for a rapidly growing population are at the heart of the issue, and managing these will be critical.

"Markets will increase and decrease over time, and there may well be some market correction for Auckland, but the questions are 'when?' and 'by what amount?'.

Healy said he was supportive of increasing deposits for investors although history had shown that loan to value ratios had a limited impact, for a limited amount of time.

"The housing issue is complicated. There are a range of options to consider, only a couple of which are in the Reserve Bank's control."