Technology adoption and usage has had a massive increase in the CV19 lockdown and is likely to be continued and become more common in usage – why drive through rush hour traffic when you can Zoom or WeChat video to meet online?
LVR Rules being abolished is another HUGE change as this removes the Reserve Bank restriction put in place in late 2017 on deposit sizes – so first home buyers with low deposit but high incomes will now be able to buy a home, subject to banking consent. And investors who have strong business cashflow or personal income will be able to use equity in their existing portfolio more positively than when LVR rules were introduced so both these sectors of the market will benefit.
The new business loan of $10,000 to a maximum of $100,000 announced recently by the Govt was due to banks not approving many business loans under the previous package. Banks are not social services and will use their own assessment business criteria upon loans whereas the Govt. is wishing to be more supportive of any business that was solvent before CV19 and needs assistance to recover due to the impact and economic fallout of the Level 4 lockdown.
The Govt has also said it wishes more speedy building consents processes to see new build construction increase rapidly to help soak up rising unemployment numbers – unfortunately in Auckland, the Council has advised that due to CV19, they will now be taking up to 40 days to review and process building consents, double the previous 20 days before CV19 – a disconnect it appears!
Commercial construction and high rise apartment blocks certainly appear to be in doubt now whereas demand for residential property still appears strong with more buyers than sellers likely in the next few months – but what nobody can predict is how the market will react by say 2021 with unknowns in recovery in many industries. The market is the market and will show us as time passes but really the multiple “opinions of experts” being offered every second day is all rather moot.
And breaking news in the past 2 days is mortgage interest rates have dropped to 2.99% pa. as mortgage war breaks out between banks – great for qualifying buyers and the lowest rates in 70 years since WW2!