Investors took out nearly $2 billion in mortgages in a month, statistics show from the Researve Bank- 33 per cent of all new lending.  The figures come as new restrictions targeting investors come into effect in early October.

The Reserve Bank rules will require 30 per cent deposits for Auckland landlords. There will also be a tax on capital gain on any investment property bought and sold within two years.

Finance Minister Bill English said it was important to look at increases in the number of first home buyers borrowing for a mortgage. That number had increased to nearly 2000 in the month of August, a jump of more than 50 per cent when compared to August last year.

Auction clearance rates in Auckland have reportedly dropped, together with attendance rates, with experts attributing the turn to investors pulling out of the market because of the new rules.

The Taxation (Bright-line Test for Residential Land) Bill, due to take effect from October, arose from the 2015 Budget and was one of several measures designed to quell the Auckland property market.

New rules:

  • Residential property investors in Auckland using bank loans must have deposits of at least 30%.
  • The existing "speed limit" for high LVR borrowing outside Auckland increases from 10% to 15%
  • Existing 10% speed limit for loans to owner-occupiers in Auckland at LVRs of greater than 80 per cent retained.
  • All buyers must have a New Zealand bank account and IRD number
  • Quick-flick tax being introduced to tax capital gain on any investment property bought and sold within two years.

Source: NZHerald