New residential construction loans will now be exempt from the loan-to-value (LVR) restrictions introduced from 1 October, Reserve Bank Deputy Governor Grant Spencer said on Tuesday.
“The Reserve Bank has recently consulted with the building industry and banks on the impact of LVR restrictions on residential construction activity,” Mr Spencer said. “While high LVR construction lending is only around 1 percent of total residential lending, it finances around 12 percent of residential building activity.
A chat with a prominent North Shore Real Estate Agent yesterday revealed an interesting anecdote on the new LVR restrictions affecting 1st Home Buyers. This agent had listed 2 similarly spec’d and priced homes next door to each other, that could of appealed to the 1st home buyer type market. 1 Auctioned prior to the new regulations and 1 straight after. Numbers through the open homes of the latter were approximately 1/5th of what they had been for the 1st home.