The bank says it’s taking the step to bring balance to the housing market.

However, managing director of property investment advisory company Opes Partners, Andrew Nicol, says tinkering with loan-to-value ratios won’t work.

“Been there. Done that. Didn’t work. The Reserve Bank’s analysis suggests that house price inflation will only be 1-2 per cent lower with LVRs, than it would be without them.”

Investors startled

The ANZ move has startled some investors.

Previously investors borrowing from ANZ were required to have equity of 30 per cent, but from December 15 they’ll need equity of 40 per cent when borrowing to buy residential property.

It won’t affect any other residential buyers, or first-home buyers.

ANZ Managing Director, Personal, Ben Kelleher said: “We’ve been closely monitoring the impact on residential property prices of historically low interest rates, reduced loan-to-value ratio (LVR) requirements and existing issues with supply and demand.

“Escalating property prices are putting home ownership out of reach for many Kiwis. The current settings favour property investors particularly over first-home buyers, potentially locking a generation of New Zealanders out of home ownership.

“It’s in everyone’s interests for residential property prices to be sustainable long term, and for home ownership to be accessible to as many people as possible.

“As New Zealand’s largest home lender, decreasing the LVR on residential investor lending is one thing we can do to help bring balance to the residential property market.”

Record investor lending

ANZ has seen two record months of residential property lending with 32.4 per cent going to residential property investors and 18.3 per cent to first-home buyers.

He said in the longer term, ANZ would be guided by the outcomes of the Reserve Bank’s consultation process early next year.

Meanwhile, Nicol says he thinks the move will be short-lived. “Mortgage policy can change overnight. I expect this one to change back quickly."

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