In my mind, the Loan to Value ratios (LVR) for investment properties should have never been reduced by the Reserve Bank of New Zealand from 35% to 20% and I struggle to understand why it has.
Will probably now join the investing hordes in this Property pile up owing to a decade of a dearth of any real investment opportunities. There’s only one or two areas in the South Island of NZ which I feel still presents value, every other area in NZ has gone full euphoric FOMO. May be the continuous money pump will never turn off (or won’t turn off for the foreseeable future) and the pull back of global asset bubbles may not eventuate in any significant sustained scary way. No one knows.
Seems to be also a lot easier today to get pre-approved for a loan in New Zealand than it was say a few years ago, the banks appear to be willingly to lend more (In my view, a jaw dropping and gobsmackingly lot more) and going through the process earlier this week does perhaps make it easier to understand why the Housing Market bubble refuses to burst and instead continues to inflate.
Again, the only risk factors to the asset markets on the radar is food security (which appears to have receded recently) and Civil Unrest which appears to be subjectively growing around the world, but still appears to be relatively benign (not raucous enough to enact any real change). Seems with all other threats the Central banks seem to be able to just add a few zeros at the end of the Global Money supply and “she’ll be right”. But who the flip knows…?
BTW: Not planning to vote for either of the two main parties in the NZ General Elections. While I believe Jacinda as our Prime Minister did do quite a reasonable job managing the COVID Outbreak (understood that opinions will differ), I’m no longer confident Labour as a party can deliver on their pledges. With the National party, there remains too many unanswered questions regarding alleged “cash for citizenships” and other questionable under the table antics (alluding to possible corruption / possible cronyism).