Latest / Best of Business / Roger Beaumont: Banking Association CEO on the upcoming changes set to impact first home buyers

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Roger Beaumont: Banking Association CEO on the upcoming changes set to impact first home buyers · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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  Speaker 2: The Reserve Bank is slightly loosening its old LVR lending
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  Speaker 2: restrictions from mortgages from December. It's going to kick in
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  Speaker 2: December one. Banks will be allowed to lend twenty five
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  Speaker 2: percent of their book to owner occupiers who have less
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  Speaker 2: than twenty percent equity. At the moment, it's restricted to
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  Speaker 2: just twenty percent of that lending. Roger Beaumont is the
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  Speaker 2: chief executive of the New Zealand Banking Association and with us.
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  Speaker 3: Hello, Roger, good evening here. That's good to be with you.
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  Speaker 2: It's good to talk to you.
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  Speaker 3: Ma.
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  Speaker 2: Does this make sense to you?
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  Speaker 3: Oh? Look, I think it's a really good move. That'll
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  Speaker 3: just give particularly first home buyers actually a little bit
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  Speaker 3: with low deposits, a little bit more flexibility in the
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  Speaker 3: market and let banks have a little bit more flexibility
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  Speaker 3: to lend to them.
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  Speaker 2: Don't mind the flexibility. But the first home buyers is
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  Speaker 2: doing pretty all right, aren't they.
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  Speaker 3: Yeah. So, the data that we have just released shows
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  Speaker 3: that in the first half of the year, of all
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  Speaker 3: new home loans that were taken out. A quarter of
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  Speaker 3: them were first home buyers, and so what I think
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  Speaker 3: that tells us, Heather, is that actually, first time buyers
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  Speaker 3: are being pretty smart here and there, taking advantage of
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  Speaker 3: what i'd call the sweet spot of softer house prices
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  Speaker 3: combined with declining interest rates. So it's a really good time.
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  Speaker 3: I mean, if I was a first time buyer, this
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  Speaker 3: is not financial advice, but as a first time buyer,
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  Speaker 3: I'd be looking really hard at the market right now.
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  Speaker 2: Yeah, totally. I see. Also, the data that you put
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  Speaker 2: out shows the total number of new home loans was
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  Speaker 2: up nearly six percent, and that's in the first half
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  Speaker 2: of the year. What do you reckon's going on there?
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  Speaker 2: Is that just people switching banks.
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  Speaker 3: There's definitely some switching activity going on there. I think
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  Speaker 3: it's very competitive for consumers in the home loan market,
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  Speaker 3: and so there's a bit of switching going on, and
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  Speaker 3: although prices are subdued, there is some movement happening.
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  Speaker 2: I need to ask you about the dreaded triple CFA legislation.
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  Speaker 2: So I've heard that the government is going to roll
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  Speaker 2: on this and it is not going to pass the
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  Speaker 2: retress spective law.
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  Speaker 3: What have you heard I haven't heard that at all,
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  Speaker 3: but we are waiting on the Select Committee's report that
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  Speaker 3: will be coming back imminently as I understand it. So
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  Speaker 3: it's gone to the Finance and Expenditure Select Committee for
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  Speaker 3: them to assess and we'll be waiting on their outcome.
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  Speaker 3: Ye with their recommendation.
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  Speaker 2: I mean, it's kind of hard for the government to
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  Speaker 2: change the law retrospectively for just one bank, which is
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  Speaker 2: A and Z Ryan.
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  Speaker 3: Well, it's also changing it for potential issues in the future.
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  Speaker 3: I mean, this is really badly written law that actually
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  Speaker 3: has left this and it's been so chipped away out
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  Speaker 3: over the years to try and fix it because it
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  Speaker 3: was such a dog's breakfast. Frankly, it's just left this
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  Speaker 3: anomaly with this four year period where you know, banks
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  Speaker 3: could be taken to task for a spelling mistake and
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  Speaker 3: a loan document and that's just ridiculous.
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  Speaker 2: Is it possible? Could the government consider changing I mean,
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  Speaker 2: you guys have a point obviously that the law does
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  Speaker 2: need to be changed. Could the government change the law
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  Speaker 2: for the future, but not retrospectively so that am Z
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  Speaker 2: still has to deal with the thing that it has
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  Speaker 2: to deal with.
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  Speaker 3: Well that there there is potentially retrospective issues that we're
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  Speaker 3: not even aware of that could come to come to
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  Speaker 3: the surface. And so it's a matter of dealing with
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  Speaker 3: it once and for all to make the law. And
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  Speaker 3: you know, all we're asking is is that the law
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  Speaker 3: is consistent with the way the law is now. So
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  Speaker 3: it's just this four year window that's an anomaly that
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  Speaker 3: needs to be fixed. And as the law is today,
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  Speaker 3: you know, it can be up to the courts to
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  Speaker 3: decide what is a fair and just outcome for consumers.
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  Speaker 2: Yeah, good to talk to you, Roger. Thank you very much.
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  Speaker 2: Roger Bomot, Chief Executive the New Zealand Banking Association.
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