The RBNZ publishes its Financial Stability Report every May and November outlining the key areas of interest relating to the NZ economy,
with a snapshot of where things sit today and things to be aware of moving forward.

As property investors, we operate in a market which is strongly influenced by the financial system, due to the need for capital and the benefit of leverage
when it comes to property as an investment vehicle. The overall state of the economy and its ongoing improvement will directly relate to the performance
of these investments due to the key value indicators of property and what causes the demand for it; therefore, it is important we keep an eye on a
few main factors:

  • Loan to Value Ratio’s (LVR) – Contrary to a lot of commentary in the market and expectations, the reserve bank did not change the current
    LVR restrictions on investment properties. Looking at properties that are not exempt from these restrictions and also non-bank lenders, the current
    restrictions mean that main banks can lend up to 70% of the value of a property as a mortgage. It was expected that this would be relaxed to perhaps
    75% or 80% following a series of economic events and also the fact that in recent years things have eased slightly, annually. While it didn’t happen
    this time around, it could still be something that does happen in the future since the LVR’s were always meant to be a temporary measure. If people
    can leverage more on their properties – it often makes purchasing more accessible, and when there are more people who are willing and able to buy property,
    it increases demand and therefore prices.
  • Interest Rates – Earlier in the year,...