News
Strong disapproval of ban on low home deposits
24 May 13
Nearly 40% of New Zealanders would disapprove of any Reserve Bank move to require home buyers to have a minimum 20% deposit, a HorizonPoll survey finds.
36.6% would approve if a deposit requirement were imposed by the Reserve Bank using a new tool in order to help deal with high housing demand and prices in Auckland and Christchurch.
24.4% are not sure when asked if they would approve or disapprove of minimum 20% deposits being required to secure a mortgage from a bank in New Zealand.
The Horizon Research May 10-20 survey of 2265 adults nationwide finds there is majority support (50.8%) for the Reserve Bank's move to require the four largest Australian owned banks operating in New Zealand (ANZ, Westpac, BNZ and ASB) to have greater reserves to cover any default by home owners with high loan to value ratios. Only 18.3% oppose the need to have larger reserves, while 30.9% are not sure.
Opposition to the idea of requiring a 20% deposit for bank mortgages runs in a strong seam among those aged 18 to 54 year-olds (between 42.7% and 48.8% disapprove), and middle to higher income households.
By occupational group, disapproval is highest among labourers, agricultural and domestic workers (61.2%), teachers, nurses, police and other trained service workers (59.5%), business managers and executives (58.2%) and homemakers not otherwise employed (54.5%).
Approval is highest among those aged 55+ and retired superannuitants (49.7% approve, 13.6% disapprove).
In comments on the impacts, if any, which higher deposit requirements may have most respondents said it would be severe. Many complained it would delay or end their intention to buy. Others complained they were not on a level playing field: that overseas buyers were borrowing at lower interest rates offshore – and bidding prices up on the New Zealand market.
Overall, do you approve or disapprove of the Reserve Bank requiring banks to have greater reserves to cover any default on loans to people buying homes with less than, say, a 20% deposit?
|
A. |
Approve |
|
50.8% |
|
|
B. |
Disapprove |
|
18.3% |
|
|
C. |
Not sure |
|
30.9% |
Would you approve or disapprove of a requirement that all home buyers must have a minimum deposit of 20% in order to secure a mortgage from a bank in New Zealand?
|
A. |
Approve |
|
36.6% |
|
|
B. |
Disapprove |
|
39.1% |
|
|
C. |
Not sure |
|
24.4% |
Results by age, household income, employment status, occupation and party vote 2011 are:
|
Would you approve or disapprove of a requirement that all home buyers must have a minimum deposit of 20% in order to secure a mortgage from a bank in New Zealand? |
||||
|
Total |
Approve |
Disapprove |
Not sure |
|
|
ALL |
2265 |
36.6% |
39.1% |
24.4% |
|
AGE GROUP |
||||
|
18-24 years |
6.6% |
24.6% |
42.7% |
32.7% |
|
25-34 years |
16.8% |
24.6% |
45.1% |
30.2% |
|
35-44 years |
18.3% |
31.8% |
40% |
28.3% |
|
45-54 years |
22.5% |
31.3% |
48.8% |
19.9% |
|
55-64 years |
18.5% |
51.5% |
32.8% |
15.7% |
|
65-74 years |
13% |
51.2% |
28.7% |
20.1% |
|
75 years or over |
3.2% |
42.8% |
15.4% |
41.8% |
|
HOUSEHOLD INCOME |
||||
|
Between $100,001 and $150,000 per year |
10.6% |
42.4% |
45.8% |
11.8% |
|
Between $150,001 and $200,000 per year |
2.5% |
40.2% |
55.5% |
4.3% |
|
Between $20,001 and $30,000 per year |
10.2% |
33.6% |
41.4% |
25% |
|
Between $30,001 and $50,000 per year |
19.7% |
42.7% |
30.7% |
26.6% |
|
Between $50,001 and $70,000 per year |
16.5% |
31.9% |
47% |
21.1% |
|
Between $70,001 and $100,000 per year |
13.1% |
32% |
50.4% |
17.6% |
|
Don't know/ prefer not to say |
17.2% |
36.9% |
26.7% |
36.4% |
|
Less than $20,000 per year |
6.8% |
24.6% |
37.6% |
37.8% |
|
More than $200,000 per year |
1% |
48.6% |
44.6% |
6.7% |
|
EMPLOYED |
||||
|
No |
35.1% |
39.2% |
30.2% |
30.5% |
|
Yes |
62.6% |
34.4% |
44.6% |
21% |
|
OCCUPATION |
||||
|
Business Manager/Executive |
7.4% |
36.8% |
58.2% |
5% |
|
Business Proprietor/Self-employed |
6.6% |
50.1% |
38.1% |
11.8% |
|
Clerical/Sales Employee |
12.1% |
29.1% |
36.1% |
34.8% |
|
Don't know/prefer not to say |
4.6% |
33.7% |
15.7% |
50.6% |
|
Farm Owner/manager |
0.7% |
100% |
||
|
Home-maker (not otherwise employed) |
5.6% |
27.7% |
54.5% |
17.7% |
|
Labourer/Agricultural or Domestic Worker |
3.1% |
28.9% |
61.2% |
9.9% |
|
Professional/Senior Government Official |
4.7% |
30% |
45.3% |
24.7% |
|
Retired/Superannuitant |
13.6% |
49.7% |
23.3% |
27% |
|
Student |
4.3% |
27.1% |
39.2% |
33.6% |
|
Teacher/Nurse/Police or other trained service worker |
7.4% |
28.8% |
59.5% |
11.7% |
|
Technical/mechanical/Skilled Worker |
8% |
45.9% |
36.3% |
17.8% |
|
Unemployed/Beneficiary |
7.8% |
27.8% |
29.4% |
42.8% |
|
MAIN BUSINESS ACTIVITY |
||||
|
Accommodation, Cafe or Restaurant |
2.5% |
16.6% |
42.9% |
40.4% |
|
Agriculture, Forestry or Fishing |
3.2% |
56.8% |
40.1% |
3.1% |
|
Communication Services |
4% |
31.3% |
38% |
30.7% |
|
Construction |
3.1% |
29.4% |
58.6% |
11.9% |
|
Cultural and Recreational Services |
2% |
56.7% |
26% |
17.3% |
|
Don't know/ prefer not to say |
7.1% |
29.3% |
25.3% |
45.4% |
|
Education |
6.3% |
30.8% |
46.4% |
22.8% |
|
Finance or Insurance |
2.8% |
18% |
60.3% |
21.7% |
|
Government Administration or Defence |
3.7% |
23% |
65.1% |
11.9% |
|
Health and Community Services |
7% |
36.2% |
47.5% |
16.3% |
|
Manufacturing |
4.5% |
42.9% |
38.5% |
18.6% |
|
Not applicable / not in paid employment |
24.2% |
36.6% |
31.4% |
32% |
|
Personal and Other Services |
2.3% |
19.6% |
62% |
18.4% |
|
Property or Business Services |
3.2% |
62% |
27.9% |
10.1% |
|
Retail Trade |
5.5% |
50% |
32.3% |
17.7% |
|
Transport or Storage |
3% |
35.1% |
47.8% |
17.2% |
|
Wholesale Trade |
3% |
30.1% |
40.8% |
29.1% |
|
PARTY VOTE 2011 |
||||
|
ACT New Zealand |
0.7% |
50.3% |
30.1% |
19.6% |
|
Chose not to vote |
17% |
27.6% |
38.5% |
33.9% |
|
Conservative |
1.7% |
44% |
36.3% |
19.7% |
|
Don't know or can't remember |
11.2% |
29.7% |
32.4% |
38% |
|
Green Party |
8.1% |
30.1% |
46.7% |
23.1% |
|
Labour Party |
19% |
32.1% |
44.4% |
23.5% |
|
Mana Party |
0.8% |
71.9% |
23.6% |
4.5% |
|
Maori Party |
1% |
22.2% |
34.3% |
43.5% |
|
National Party |
32.9% |
46.6% |
37.9% |
15.5% |
|
New Zealand First Party |
4.8% |
42% |
43.5% |
14.5% |
|
Other party |
0.4% |
21.4% |
30.6% |
48% |
|
United Future |
0.5% |
24.6% |
52.8% |
22.7% |
|
Was not eligible to vote |
1.1% |
40.1% |
13.3% |
46.6% |
Results are weighted by age, gender, ethnicity, personal income, region and party vote 2001 to provide a representative sample of the New Zealand population aged 18+ at the 2006 census. At a 95% confidence level, the maximum margin of error is +/- 2.1%.
Respondents were advised before answering the questions:
The Reserve Bank says it is concerned about high house prices in Auckland and Christchurch, caused by a lack of housing supply, high demand, and low interest rates.
The Reserve Bank on May 8 announced that from September, 2013, it will require the four big Australian owned banks in New Zealand (ASB, BNZ, ANZ and Westpac) to have more funds in reserve to counter any risks they may face from making loans to people buying houses who do not have a 20% deposit. These are called high loan to value ratio loans.
Some reports say this could put up floating mortgage interest rates for those wanting to borrow more than about 80 per cent of a home's value, from about 5.85 per cent to about 6 per cent.
The Reserve Bank is also looking at an option to require a 20% deposit from those borrowing to buy homes. Some argue this will drive borrowers to non-bank lenders, like finance companies, which charge higher interest rates, for money for deposits.
For further information on this research, please contact
Grant McInman, Manager, Horizon Research Limited, telephone 021 076 2040, e-mail gcolman@horizonresearch.co.nz
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