* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Saturday, June 28, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    Susquehanna Raises Penn Entertainment Inc. (PENN) Price Target. – Yahoo Finance

    Susquehanna Raises Price Target for Penn Entertainment Inc. (PENN)

    George Lopez is coming to Spokane – KXLY.com

    George Lopez is coming to Spokane – KXLY.com

    Netflix unveils Dallas immersive venue for fans of hit shows like ‘Squid Game,’ ‘Stranger Things’ – Houston Chronicle

    Step Inside Netflix’s New Dallas Immersive Experience Featuring Hits Like ‘Squid Game’ and ‘Stranger Things

    ‘Puttin’ on the Ritz’: Civic Players bring ‘Young Frankenstein’ to life – Yahoo

    Civic Players Deliver a Hilarious and Unforgettable Performance of ‘Young Frankenstein

    ‘Wheel of Fortune’: Amputee Wins $60,000 After Breaking Incredible ‘Curse’ – Hastings Tribune

    Wheel of Fortune’ Amputee Breaks Incredible ‘Curse’ to Win $60,000!

    North Star Sports & Entertainment Network: Coming soon – KTTC News

    North Star Sports & Entertainment Network: Coming soon – KTTC News

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Ostin Technology (OST): Volatility’s Warning or Contrarian Opportunity? – AInvest

    Ostin Technology (OST): Navigating Market Volatility – Red Flag or Hidden Opportunity?

    St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

    St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

    Wayve Expands Engineering Leadership to Power Next-Gen Autonomous Driving Technology – Silicon Canals

    Wayve Boosts Engineering Leadership to Accelerate Next-Gen Autonomous Driving Innovation

    Frontdoor Announces Tech Expert Dr. Bala Ganesh as Chief Technology Officer – Business Wire

    Frontdoor Appoints Tech Visionary Dr. Bala Ganesh as New Chief Technology Officer

    Defense technology giant Northrop Grumman to host interviews in Iuka to fill technician roles – supertalk.fm

    Defense technology giant Northrop Grumman to host interviews in Iuka to fill technician roles – supertalk.fm

    China’s Military Introduces Mosquito-Sized Drones: A Game-Changing Surveillance Technology – Indian Defence Review

    China Unveils Mosquito-Sized Drones: Revolutionizing Surveillance Technology

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    Susquehanna Raises Penn Entertainment Inc. (PENN) Price Target. – Yahoo Finance

    Susquehanna Raises Price Target for Penn Entertainment Inc. (PENN)

    George Lopez is coming to Spokane – KXLY.com

    George Lopez is coming to Spokane – KXLY.com

    Netflix unveils Dallas immersive venue for fans of hit shows like ‘Squid Game,’ ‘Stranger Things’ – Houston Chronicle

    Step Inside Netflix’s New Dallas Immersive Experience Featuring Hits Like ‘Squid Game’ and ‘Stranger Things

    ‘Puttin’ on the Ritz’: Civic Players bring ‘Young Frankenstein’ to life – Yahoo

    Civic Players Deliver a Hilarious and Unforgettable Performance of ‘Young Frankenstein

    ‘Wheel of Fortune’: Amputee Wins $60,000 After Breaking Incredible ‘Curse’ – Hastings Tribune

    Wheel of Fortune’ Amputee Breaks Incredible ‘Curse’ to Win $60,000!

    North Star Sports & Entertainment Network: Coming soon – KTTC News

    North Star Sports & Entertainment Network: Coming soon – KTTC News

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Ostin Technology (OST): Volatility’s Warning or Contrarian Opportunity? – AInvest

    Ostin Technology (OST): Navigating Market Volatility – Red Flag or Hidden Opportunity?

    St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

    St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

    Wayve Expands Engineering Leadership to Power Next-Gen Autonomous Driving Technology – Silicon Canals

    Wayve Boosts Engineering Leadership to Accelerate Next-Gen Autonomous Driving Innovation

    Frontdoor Announces Tech Expert Dr. Bala Ganesh as Chief Technology Officer – Business Wire

    Frontdoor Appoints Tech Visionary Dr. Bala Ganesh as New Chief Technology Officer

    Defense technology giant Northrop Grumman to host interviews in Iuka to fill technician roles – supertalk.fm

    Defense technology giant Northrop Grumman to host interviews in Iuka to fill technician roles – supertalk.fm

    China’s Military Introduces Mosquito-Sized Drones: A Game-Changing Surveillance Technology – Indian Defence Review

    China Unveils Mosquito-Sized Drones: Revolutionizing Surveillance Technology

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home Business

Investors may see biggest impact of Reserve Bank’s lending limits

May 28, 2024
in Business
Investors may see biggest impact of Reserve Bank’s lending limits
Share on FacebookShare on Twitter

Young woman getting keys to new apartment from realtor. Family buys, rents new house. Customers or renters buy or rent real estate, close up

Photo: 123RF

Explainer – The Reserve Bank has announced it will introduce debt-to-income ratios and tweak the loan-to-value restrictions that apply to home loans, from the start of July.

But what does that mean, and is it going to make it easier or harder to buy a house?

Experts say it will be a big shift – particularly for investors – but the full effects won’t be seen immediately.

What’s changing?

The Reserve Bank says that from 1 July, banks will only be able to lend about 20 percent of their new lending to owner-occupier borrowers with a debt-to-income ratio of more than six. That means, if your household earns a combined $100,000, your loan will be limited to $600,000.

Banks will only be able to lend 20 percent of lending to investors with a DTI of more than seven.

The rules won’t apply to Kainga Ora loans, new builds or refinances.

At the same time, the bank will loosen the loan-to-value ratio (LVR) restrictions so that banks can lend 20 percent of their lending to owner-occupiers with deposits of less than 20 percent, from 15 percent at the moment, and 5 percent of lending can be done to property investors with equity or deposits of less than 30 percent, compared to 35 percent at present,

Why?

The Reserve Bank says the rules are designed to make sure the banks do not take on too much risky lending during “booms”. If people borrow loans that are large compared to their incomes, it becomes harder for them to service when times are tough.

How much difference will it make for buyers?

At the moment, not a lot. There is not much lending being done at high DTIs at the moment, probably because high interest rates make it unaffordable.

The rules are expected to be more of a handbrake when interest rates are low and things are a bit frothy.

CoreLogic chief property economist Kelvin Davidson said they could be significant in future.

Kelvin Davidson

Kelvin Davidson
Photo: SUPPLIED

He said people were probably downplaying the impact of DTI ratios, particularly on investors, because they would not have a big immediate impact.

“They are a big deal. In the longer term mortgage rates will come down again and that’s when DTIs will kick in.”

He said it would probably slow the rate at which property investors could accumulate more properties.

“Previously, under LVRs, if the market went up, there’s your next deposit. This is quite removed from that. It’s all about income and you can’t change that straight away.”

The rent that would come from a rental property would often not be enough of an income boost.

Davidson said earlier Reserve Bank modelling showed, with DTIs, it could take six or seven years for a property investor to build up equity from one purchase to buy another. He said that probably compared to two or three years at the moment.

“That’s the big shift that’s been under-reported or underappreciated. It’s a pretty big change but it will only become visible over the longer term.”

Property investment coach Michael Burge said he did not expect a DTI of seven to have too much impact.

“If they want to slow investors down, then they will just lower that DTI,” he said. “But the economy is stuffed and house prices are flat at best, and dropping in some areas still, so I don’t see the need for them to make it harder on investors.”

The Reserve Bank noted first-home buyers and those on lower incomes were expected to be mostly unaffected by the introduction of DTIs because they already faced other serviceability criteria.

As for the LVR changes, CoreLogic data shows owner-occupiers are already borrowing below the current limits.

Only 9 percent of new lending to owner-occupiers was to people with a deposit of less than 20 percent in April.

About 80 percent was to first-home buyers.

But Davidson said the change could provide a bigger benefit to investors, who currently have virtually no options for a loan if they have less than 35 percent deposit.

“Say you’ve got a 33 percent deposit, right now you can’t buy but in a month’s time you can, provided you meet the other serviceability testing… it might boost demand a little bit but I’m not expecting a massive boost because you’ve still got to service the higher mortgage rates and as an investor your rental yields are still low.”

What does it mean for house prices?

No caption

File pic
Photo: RNZ / Maree Mahony

The Reserve Bank said it would help ensure house prices remained at sustainable levels because growth in home loans would have to be more closely linked to income growth.

Davidson agreed it would probably mean that house price growth was slower. “We have seen 6 percent or 7 percent on average for a long time but it could be more like 4 percent because income growth is lower and this makes that linkage more clearly.

“I don’t think it suddenly restores housing affordability overnight but over time, if it can restrict house price growth to a lower pace it does prevent affordability getting even worse. If there are fewer investors in the market there’s more opportunity for other buyer groups – that’s a pretty big shift.”

Westpac economists said it could push investors to regions with lower house prices.

“Lower prices compared to incomes will make it easier to jump the DTI hurdle. Very highly priced regions – for example, the Queenstown Lakes region – would be correspondingly disincentivised for both first-home buyers and investors.

“Over time, this may influence investment flows and regional house price trends.”

Westpac still expected a price rise of 6 percent over 2024 and another 7 percent in 2025, alongside wage growth of 2 percent and 3 percent, respectively.

BNZ chief economist Mike Jones said he expected that the impact of DTIs would be seen on house prices in 2025.

“It’s one factor that could slow down any house price appreciation we do see next year as interest rates start to come down because you’re looking at a much harder limit than we see in the likes of LVRs.”

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : RNZ – https://www.rnz.co.nz/news/national/518076/investors-may-see-biggest-impact-of-reserve-bank-s-lending-limits

Tags: biggestbusinessInvestors
Previous Post

Former Talisman Gold Mines boss fined $100k over online posts

Next Post

Low interest rate expectations ‘good indicator of future house prices’

Ostin Technology (OST): Volatility’s Warning or Contrarian Opportunity? – AInvest

Ostin Technology (OST): Navigating Market Volatility – Red Flag or Hidden Opportunity?

June 27, 2025
Vote for the Blue Water Area’s top high school sports moment from the 2025 spring season – Times Herald

Cast Your Vote for the Blue Water Area’s Most Unforgettable High School Sports Moment of Spring 2025!

June 27, 2025
Opinion: American Science Is in a Nosedive – and We’re All on Board – The Austin Chronicle

Opinion: American Science Is in a Nosedive – and We’re All on Board

June 27, 2025

Food contact articles as source of micro- and nanoplastics: a systematic evidence map | npj Science of Food – Nature

June 27, 2025
Michelle Dee is featured in Pride Month issue of digital lifestyle magazine – GMA Network

Michelle Dee is featured in Pride Month issue of digital lifestyle magazine – GMA Network

June 27, 2025
These are the best airlines of 2025 – and no US carrier made the list. Here’s why. – USA Today

These are the best airlines of 2025 – and no US carrier made the list. Here’s why. – USA Today

June 27, 2025
Britain’s industrial strategy is unlikely to boost its economy – The Economist

Britain’s industrial strategy is unlikely to boost its economy – The Economist

June 27, 2025
Ashley Jensen joins Superior Clinic to practice family medicine – Essentia Health

Ashley Jensen Joins Superior Clinic to Deliver Expert Family Medicine Care

June 27, 2025
Heads of state and political leaders gather at ‘Summer Davos’. Here’s what they are saying – The World Economic Forum

Heads of state and political leaders gather at ‘Summer Davos’. Here’s what they are saying – The World Economic Forum

June 27, 2025
St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

St. Francis Medical Center brings advanced robotic surgery technology to Northeast Louisiana – KNOE

June 27, 2025

Categories

Archives

June 2025
MTWTFSS
 1
2345678
9101112131415
16171819202122
23242526272829
30 
« May    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (699)
  • Economy (720)
  • Entertainment (21,613)
  • General (15,595)
  • Health (9,759)
  • Lifestyle (725)
  • News (22,149)
  • People (722)
  • Politics (727)
  • Science (15,937)
  • Sports (21,217)
  • Technology (15,705)
  • World (700)

Recent News

Ostin Technology (OST): Volatility’s Warning or Contrarian Opportunity? – AInvest

Ostin Technology (OST): Navigating Market Volatility – Red Flag or Hidden Opportunity?

June 27, 2025
Vote for the Blue Water Area’s top high school sports moment from the 2025 spring season – Times Herald

Cast Your Vote for the Blue Water Area’s Most Unforgettable High School Sports Moment of Spring 2025!

June 27, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version