The New Zealand Herald has speculated that the mortgage lending industry in New Zealand may introduce new criteria to borrowers looking to purchase a property.
One of the changes suggested was a reduction in the deposit requirement for buying an apartment. Currently, anyone taking a mortgage on an apartment needs a minimum 20% deposit, some banks may cut this requirement to 15% in order to stimulate demand for that type of property. Under the new criteria, an apartment costing NZ$500,000, which previously needed a deposit of NZ$100,000, will require a down payment of NZ$75,000.
The newspaper also speculated that the Reserve Bank might apply stricter lending conditions to restrict how much property buyers can borrow. Unlike in the UK, where most lenders apply loan-to-income restrictions on borrowers (typically to a maximum of around three times salary), New Zealand lenders do not take income into account in the same way.