Investors pile in before LVR changes

CoreLogic says its Buyer Classification figures for January show mortgaged investors had a 30% share of property purchases. This is the highest on record and indicates the Reserve Bank was on firm ground raising deposit requirements for investors to 30% from March 1 and 40% from May 1. 

However, some may be missing out already as ASB has immediately increased the minimum deposit required from investors to 40% from its current 30%.

ASB chief executive Vittoria Shortt says the bank is concerned the continued high levels of investor demand for property are unsustainable and its decision to immediately raise the minimum deposit to 40% is about ensuring a balanced and sustainable housing market.

It is the second time in three months ASB has adjusted its loan-to-value ratio (LVR) restriction. It reinstated a 30% minimum deposit requirement for investors in November after the Reserve Bank indicated it was considering the reintroduction of LVRs because it was concerned about the risk a sharp correction in the housing market poses for financial stability.