PHOTO: ANZ FILE
According to ONEROOF the country’s largest bank is hiking the deposit required for new builds in a move financial advisers say is another blow for struggling first home buyers.
From May 16, ANZ will require a 15% deposit on new home builds, up from the 10% deposit currently required.
An ANZ said spokesperson told OneRoof the latest changes to the loan-to-value ratio rules for construction lending were aimed at making sure customers were not over-exposed if they experienced significant cost overruns and needed to borrow additional funds to complete their project.
The changes were being driven by the cost inflation for building materials and the wage cost pressures impacting the construction industry, the spokesperson said.
According to the New Zealand Institute of Quantity surveyors, the price of some building materials has over the past 12 months increased by up to 30%, with supply chain delays also having an impact on costs.
ANZ’s new criteria will apply to any applications currently in the pipeline that have not been approved by May 16. Any pre-approvals signed off before May 16 will be honoured.
ANZ has also increased the cost overrun allowance for fixed price contracts from 10% to 15%.
EasyStreet mortgage adviser Gareth Veale told OneRoof this would make it much harder for first home buyers – who often had smaller deposits – to get their foot on the ladder.
He has clients who have committed to builds that were more than three or six months out and could fall outside the period of an ANZ approval.
“They go to renew and the deposit requirements have gone up,” he said
Veale was also waiting on three applications to be processed and if they are not approved by Monday then he said there was no possibility of a loan through ANZ.
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