IMPORTANT: The Reserve Bank’s 60% LVR announcement this week does not mean you’re locked out of the investment market.
Investors are still able to purchase House & Land and Off The Plan apartments at 80% LVR, so expect to see significant investor shift toward these property types while the 60% LVR restriction is in place.
This announcement reinforces our investment strategy because:
- New, high quality investment property is at the lowest risk of vacancy and significant rent drops. Even when the rental market is oversupplied, brand new, quality houses will be in tenant demand.
- When you go to sell, owner occupiers are the ideal purchaser. They will “fall in love” with a property, i.e. they will pay more AND they won’t be restricted to a 60% LVR. To attract owner occupiers, new and quality stock is key.
Find out more about the strategies we use to invest in property at a Property Investor Night.
Is the Reserve Bank trying to lock investors out of the market entirely?
No. There is a reason the 60% LVR restriction only applies to existing property.
The purpose of this change is to ease house price increases without curbing supply. Investors play an vital part in increasing housing supply, so to completely lock investors out of the property market is counter-productive.
Smart investors see this as an opportunity
Instead of folding and running for the hills, learn how to find ways to continue to move forward. For example, you may still borrow 80% on your home. This is an excellent opportunity to review any capital growth your home may have had and to reassess your equity situation. Investors may find that recent capital growth has given them more equity in their home than they realised.
Remember: Government intervention on property prices is a double-edged sword. While the Reserve Bank doesn’t want property growth to happen too quickly, investors can be confident they’ll go to the same lengths when the market is colder to make sure there is some growth.
Get all the information you need at a Property Investor Night in your area.
You’ll be able to book a free consultation with a Property Coach to discuss your situation and how you can move forward.