Tony’s Thoughts – The NZ$1billion Infrastructure Fund

The NZ$1 billion housing pitch announced by the Government and focus on the First Home Buyer sounds like a step in the right direction.  I do wonder what the First Home Buyer landscape would be like if they had somehow excluded First Home Buyers from the LVR rules introduced back in October 2013.  While it was the Reserve Bank that did that, surely the Government must have had a say?  The LVR rule excluded a large percentage of First Home Buyers from the Market and allowed the Investors a free hand to rapidly increase their portfolios in a low interest rate environment.  If the First Home Buyer had been still able to borrow up to 95%, many more would be fulfilling their home ownership dream instead of being blocked from the Market.  Some 40% to 50% of house sales are made by Investors depending on the Region.  Good on the Investor for taking the opportunity given but what a shame for the First Home Buyer.  What good did it do?  The Market remains hot and perhaps overheating, so the answer is… ‘it did no good at all’ – all it did was stifle many hardworking, good young people’s dream of home ownership.

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