Up to 95% lending for New Build Homes

Santa spreads his Christmas joy…

  1. RBNZ exempts brand-new homes from the lending restriction rules
  2. OCR Kept at 2.5 per cent
  3. Lending above 80 per cent available in selective instances.
  4. Handy Christmas holiday tips to keep your home safe, by Lyndon Mason- Insurance Guru

1. Residential construction homes will be exempt from the recent lending restrictions, says the Reserve Bank

A great Christmas present has been handed to residential developers and purchasers alike. The Reserve Bank has decided to exempt brand-new residential construction from the recent lending restrictions, a decision that was made after discussions with the industry. Reserve Bank Deputy Governor Grant Spencer, says “while less than 20 per cent deposit construction lending is only around 1 per cent of all residential lending, it finances around about 12 per cent of residential building activity.”

This exemption is fantastic for those hoping to borrow for the construction of a home. “Small deposit lending will fall outside the 10 per cent speed limit if it is financing the construction of a brand-new house or apartment,” says Mr Spencer. With the exemption applying to all loan applications from October 1 (which, as you may recall, was when the October loan rules were introduced), loan rules are no longer a barrier to constructing a home.

This exemption should be like a giant can of Red Bull for the residential construction sector – giving it wings so it can really take off! Not only can full building projects now get funding, this also gives the building industry a significant point of difference and market advantage. I personally think that this is a great result for first home buyers as well as people who aspire to live in a brand-new well insulated home. Each bank will still have their own policy around this exemption, thus do get in touch if you want to see if you qualify.

Worries were aplenty in the building industry over LVR restrictions, with many builders concerned that this will curb the Government’s efforts to increase the number of homes being built. Should fewer houses be built, efforts to curb house price inflation would likely be in vain.

2. OCR Kept at 2.5 per cent - Stable once again

The reserve banks has kept the OCR at 2.5 per cent but have indicated that an increase in rates is likely in 2014.

3. Lending above 80 per cent available in selective instances

We are expecting the banks to start lending again above 80 per cent early next year which would provide a bit of relief for a lot of people. Some of the banks are already lending above 80 per cent funding but the criteria is very limited. If you’re interested in different options, check out my previous update here https://www.loanmarket.co.nz/nick-kotze/news/the-20-percent-deposit-myth

4. Handy Christmas holiday tips to keep your home safe Lyndon Mason, Insurance Guru

If you’re planning on going away these holidays, it’s important to make sure your home is safe – after all, there’s nothing worse than coming back from a relaxing holiday to find a VERY stressful situation at home. Burglars take advantage of owners being away, and watch for signs that no one’s occupying your house.

Here are some tips:

  • Let a trusted neighbour know you're away so that they can keep a close watch on your house
  • Have the mail cleared regularly from your letterbox
  • Don’t leave valuables out in plain sight
  • Get a timer that can turn a light and/or radio on and off
  • Set your house alarm
  • Get the lawn mower man to come and mow your lawns (for those of you lucky ones that are away long enough!)
  • Don’t forget to get a slow release fish food block to avoid disappointed kids and lots of awkward questions on the return home (nothing to do with protecting your home, but a tip well worth sharing!)

Lyndon Mason 021 222 1591

Nick Kotze 0211 9 444 24