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Speaker 1: So a record portion of new banking bank lending to

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Speaker 1: first home buyers is going to people with small deposits,

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Speaker 1: and this is thanks to looser lending rules from the

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Speaker 1: Reserve Bank. Jene Tibstraaney, the Herald's Wellington Business editor, is

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Speaker 1: with us on this hygien eight. Hi, heaven give me

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Speaker 1: the numbers.

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Speaker 2: All right. So in January, banks lean one point one

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Speaker 2: billion dollars to first home buyers. Of that one point

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Speaker 2: one billion, fifty seven percent went to first home buyers

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Speaker 2: with deposits of less than twenty percent. So that fifty

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Speaker 2: seven percent, more than half of new lending to first

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Speaker 2: home buyers went to borrows with relatively small deposits. Now,

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Speaker 2: you know, a deposit of fifteen percent is not alarming,

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Speaker 2: but that portion is definitely higher than it's ever been

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Speaker 2: in the past. So, you know, people who've tried to

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Speaker 2: get a mortgage will be aware that the Reserve Bank

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Speaker 2: composes these LVR restrictions on banks. You know, the Reserve

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Speaker 2: Bank doesn't want banks to lend too much to people

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Speaker 2: with small deposits, trying to protect banks from themselves. But

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Speaker 2: you know, first home buyers, it would appear, have been

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Speaker 2: trying to make the most of the low interest rates,

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Speaker 2: flat house price growth, attractive cash backs offered by banks,

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Speaker 2: and slightly looser LVR restrictions currently imposed by the Reserve Bank.

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Speaker 1: Does feel a little bit like, you know, it has

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Speaker 1: been the story that first home buyers have been dominating

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Speaker 1: all like a significant force in the property market for

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Speaker 1: so long. Now it does feel like the new normal,

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Speaker 1: doesn't it.

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Speaker 2: Yeah. Look, I mean they've definitely been prominent, I think

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Speaker 2: probably since the end of the Labor Party's time and

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Speaker 2: government because you know, the interest deductibility rules put investors off.

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Speaker 2: You know, Labor stopped investors from deducting all of their

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Speaker 2: interests and expense, the bright line tests was taken to

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Speaker 2: ten years, which which really did make it like a

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Speaker 2: capital gains tax. And also the Reserve Bank composed really

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Speaker 2: strong LVR and debt to income restrictions on investors, so

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Speaker 2: I think that that put them out. And then of

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Speaker 2: course the high interest rates that didn't help. So you know,

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Speaker 2: it has made way for foth first time buyers. I

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Speaker 2: must say. Yeah, if you just look at the bank

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Speaker 2: lending figures, as some of us do, look at them

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Speaker 2: quite a lot, you know, investors have pulled back a

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Speaker 2: lot and during times with the property market has been hot.

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Speaker 2: You know, they were taking out a lot of debt

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Speaker 2: and you know, small deposits and lots of debt compared

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Speaker 2: to the incomes. That's totally changed.

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Speaker 1: Now, will you take on this, because I know you've

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Speaker 1: been covering it, looking at the scale of what the

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Speaker 1: Reserve Bank is wanting, wanting from retail banks with cash

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Speaker 1: access business, the cash Access plan, looking at the reaction

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Speaker 1: from the retail banks, and then the admission today from

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Speaker 1: the Governor that they had maybe actually not done this

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Speaker 1: quite the right way. I'm putting these things together and

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Speaker 1: I'm thinking the Reserve Bank is going to have to

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Speaker 1: scale back what it's proposed. What do you.

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Speaker 2: Think I definitely think so. So we discussed this last week,

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Speaker 2: I think it was on the show. The Reserve Bank

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Speaker 2: is proposing to require banks to set up about one thousand,

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Speaker 2: three hundred new banking hubs. So those are ones where

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Speaker 2: all the banks team up and they let you take

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Speaker 2: money out and let you also deposit money. Now, currently

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Speaker 2: there are five of those hubs five the Reserve Bank

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Speaker 2: wants one thousand, three hundred and wants people to be

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Speaker 2: able to use those for free. You know, that's a

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Speaker 2: pretty hefty proposal, and as we talked about, I think

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Speaker 2: there's clearly a problem. People don't have enough access to

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Speaker 2: cash services. It's not just taking cash out, but it's

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Speaker 2: if you have a business, it's being able to go

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Speaker 2: to the bank easily or go somewhere easily and deposit

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Speaker 2: your money. But the first question I asked the Reserve

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Speaker 2: Bank on this last week, is your proposed response proportionate

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Speaker 2: one than three hundred? Does sound like a lot of

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Speaker 2: banking hubs. The Reserve Bank said, if they don't do

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Speaker 2: banking hubs, maybe if they just do ATMs, it would

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Speaker 2: need like three thousand more three thousand. I feel like

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Speaker 2: they're going to have to scale it back in terms

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Speaker 2: of the bank's responses. I talked to k E Banks

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Speaker 2: chief executive Steve Yukovic, and he said, you know, the

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Speaker 2: bankers they had lunch with the Reserve Bank the day

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Speaker 2: before it released its plan, and the Reserve Bank didn't

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Speaker 2: say anything about the plan, so they felt blindsided. I

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Speaker 2: don't think, you know, probably not too much love will

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Speaker 2: be lost for the banks. They'll be all right. No,

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Speaker 2: they're tough enough always, they'll be fine. But you do

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Speaker 2: need to have a proportionate response to a problem.

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Speaker 1: Too right, Hey listen, Thank you very much. As always,

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Speaker 1: I appreciate it. Janative Trainey, the Herald's Wellington Business editor.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news talks.

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Speaker 1: It'd be from four pm weekdays, or follow the podcast

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Speaker 1: on iHeartRadio