Newland: Buyers will find a way around restrictions
“There is nothing new about these sorts of restrictions. We had them all through the 1960s, 1970s and 1980s… All sorts of creative ideas where dreamt up to get around the ‘regulations’. It’s clear to me and others that if the proposed LVR limits are imposed, these old tricks (and some new ones, no doubt) will be dusted off and come back with a vengeance.”
He said purchasers who had to find a 33.33% deposit used to turn to second mortgages from vendors, loans from parents, credit cards, personal loans, solicitors’ nominee companies, buying with friends, rent-to-buy schemes and guarantors for the money to make up the difference.
And he said they would likely do the same again.
“There are still solicitors nominee lenders around today — so if you, or someone you know, is short of deposit, and if the Reserve Bank gets off the fence and actually imposes LVR limits, a few phone calls to the right people will hopefully soon sort the problem out.”
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