The move addresses the rapid growth in home lending volumes
ASB has increased the minimum deposit required from investors from 30% to 40%, effective immediately.
ASB chief executive officer Vittoria Shortt said the bank adjusted its loan-to-value ratio (LVR) restrictions after considering the unsustainability of the continued high levels of investor demand.
The changes will apply to home loan applications and top-ups that have not yet been conditionally or fully approved, and rollover of existing conditional or full approvals at expiry. They will not affect pre-approvals already in place.
The recent adjustment is the second time in three months that ASB has adjusted its LVR restrictions. In November, the bank reinstated the 30% LVR restrictions following the Reserve Bank of New Zealand (RBNZ)'s announcement that it will reinstate LVRs in March this year.
“We are very focused on being a prudent and responsible lender. We all have to play our part, and this decision to immediately increase the deposit required from investors is about ensuring a balanced and sustainable housing market which is in the best interests of all New Zealanders,” Shortt said.
