ASB backpedals on imposing lending restrictions on investors for new builds

Move follows criticism from property investors that restrictions would impact housing supply

ASB backpedals on imposing lending restrictions on investors for new builds

ASB has backpedalled from requiring a 40% deposit from property investors for newly constructed homes, according to a NZ Herald report.

ASB had earlier announced that property investors were required to make a 40% deposit for loans on new builds, even though the Reserve Bank of New Zealand (RBNZ) had exempted the property type from loan-to-value (LVR) restrictions.

Read more: ASB adjusts LVR restrictions

However, after significant push back from property investors concerned that the restriction would negatively impact the country’s housing supply, ASB said that it was backing down from the requirement.

“We acknowledge that in trying to do the right thing for Kiwis, and for first home buyers, in particular, we may not have got the balance quite right,” Craig Sims, executive general manager, retail banking at ASB, told NZ Herald, adding that the bank had moved to follow RBNZ’s exemption and enable lending of greater than 60% LVR for newly constructed dwellings.

“ASB is certainly focused on helping grow New Zealand’s housing stock,” Sims told NZ Herald. “Earlier this month we announced that we will apply some of the funds available to us under the RBNZ Funding for Lending programme to provide discounted lending for new, energy-efficient homes. This offer will be available to owner-occupiers and investors alike and further details will be available in the coming months.”