Loosening CCCFA rules welcome news for Hamilton property market

5 Apr 2024 The Lodge Real Estate Team

Buying, Property Investment

News of the government’s decision to loosen the CCCFA (Credit Contract and Consumer Finance Act) will be music to homebuyers’ ears, and Hamilton may be uniquely placed to benefit most, says Lodge Managing Director Jeremy O’Rourke.


The CCCFA outlines a set of responsible lending principles that lenders must adhere to. In December 2021 a raft of amendments made were designed to protect vulnerable people from predatory lending, in an effort to stop borrowers from being given loans they couldn’t afford to pay back. These rules were criticised as overly prescriptive, resulting in cases where otherwise suitable borrowers were declined home loans.


The government’s latest action plan, unveiled this week, promises to reform the CCCFA and make it easier for homebuyers to access lending.


Jeremy says this is welcome news for homebuyers, and potentially for Hamilton in general, as with buyers able to access finance more easily, they could potentially invest in home ownership, or investment properties, in New Zealand’s fastest growing city.


“We already know Hamilton has become an extremely attractive proposition for homebuyers. Migration into the area continues at pace, businesses and employers are choosing to relocate here, and we now sit at the top of the table as New Zealand’s fastest growing city.


“If homebuyers now have even a slightly easier time accessing finance, I can only see positive things happening in our property market, especially in terms of more listings becoming available as sellers recognise an increased appetite among buyers.”


Proposed changes to the CCCFA include a simplified application process, with potentially less time to have a home loan approved; currently it can take as long as two weeks for a home loan to go through. Low-risk lenders will see prescriptive requirements removed, and the government is also pledging to undertake a review of the act in general.


Jason Waugh, Lodge City Rentals General Manager, says this news should also put a smile on investors’ faces, especially as it follows the recent re-introduction of interest deductibility for landlords.


“This change will certainly be attractive to anyone looking at a mortgage and any change that helps people, including investors, purchase property is a good thing.


“The rentals market in Hamilton has never been so buoyant, and with demand for rentals readily outstripping supply, we certainly welcome this news and the potential positive impact it may have on Hamilton’s property market in the months to come.”

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