As predicted, alternative sources of money enter the market …

Australian finance companies are funding NZ homebuyers

Just as Olly forecast in July’s column, How to Avoid the Coming Lending Crunch … or: Will the Cure be Worse than the Disease? “Business meets market needs”… already alternative finance sources are beginning to appear in response to the Reserve Bank’s LVR restrictions (which only apply to trading banks).

3News reports:

Australian lenders are stepping in to help first-time Kiwi homebuyers left out in the cold by the Reserve Bank’s new lending rules.
They’re offering finance to those who only have 10 percent of the house price.
Rules limiting low deposit lending came into force this [month] aimed at dousing the red hot housing market. And just as homeowners with less than a 20 percent deposit were giving up the house hunt, Australian lenders are now offering to bridge that gap.
Finance brokers backed by cash from across the Tasman are turning up at Auckland auctions offering to lend up to 90 percent of a home’s value.

Read on at 3News

It remains to be seen how effective that bit about ‘dousing the red hot housing market’ proves to be.

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