'you can't lose with property'., page-15

Latest news from our friends across the Tasman sez the Auckland residential mkt is sliding sharply. Do ANZ finance houses in NZ? hope not.

Auckland housing market craters

By Unconventional Economist in New Zealand Economy
at 10:28 am on February 11, 2016 | 5 comments
By Leith van Onselen
The Real Estate Institute of New Zealand (REINZ) has released its house price index for January, which posted a 1.3% monthly seasonally-adjusted rise at the national level, with prices rising by 4.9% year-on-year.

However, prices in Auckland posted a 1.3% season-adjusted decline in January, and have fallen quite sharply over over recent months (see next chart).

Auckland sales volumes have also fallen sharply (see next chart).

On 1 October 2015, the New Zealand Government implemented new tax rules and residential requirements, which:

• requires non-residents and New Zealanders buying and selling any property other than their main home to provide a New Zealand IRD [tax file] number;
• requires non-residents to have a New Zealand bank account to get a New Zealand IRD number; and
• introduces a new “bright line” test to tax gains from residential property sold within two years of purchase, unless it’s the seller’s main home, inherited or transferred in a relationship property settlement.

From 1 November, the RBNZ’s new rules on Auckland residential investor loans also came in to force requiring the bulk of these loans to have a loan-to-value ratio (LVR) of no more than 70%. Banks are also now required to put residential property investment loans in a separate asset class and hold more capital against them.
Both measures appear to be weighing on Auckland housing.