ASB Offers Low Interest Rates for Newly Built Properties

May 17, 2021 12:49 PM AEST | By Roma

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ASB Offers Low Interest Rates for Newly Built Properties — Image source: godshutter, Shutterstock

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Summary

ASB offers low rate of interest for newly built homes.

Energy-saving homes to get an additional cashback benefit.

An attempt to boost the market conditions after increasing prices.

Housing Sector woes seem nowhere close to end right now. With the government introducing policies one after the other, it will be time before the housing prices start cooling off. However, the housing prices for first-time owners are a cause for concern for the New Zealand government as Prime Minister Jacinda Ardern spelled out while announcing certain demand and supply measures recently. In this context, the ASB Bank has announced a small rate of interest of 1.79% for the construction of new homes. This shall also be applicable if someone invests in a land and home package deal.

Many other major banks are currently offering an interest rate of 2.25% in a similar scheme. The executive General Manager for ASB, Craig Sims, was of the view that the rate of interest being offered by them in their Back my Build scheme is in accordance with the Reserve Bank’s programme for lending. This programme was bought into existence last year in order to give a positive boost to the COVID-19-induced economic conditions. They are hoping that with the help of this new scheme, ASB would be responsible for funding as many as 1,000 new deals for home loans in the country.

Sims further said that that scheme was launched so that the housing sector in New Zealand got some help. It is a sector that is currently under a lot of fire because of several factors, and ASB along with the Government, simply wishes to provide the Kiwi population with quality homes at affordable prices.

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Also read: Jacinda Ardern Optimistic About NZ’s Growth With Possible FTAs With UK And EU In Future

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Besides, the discounted rate of interest, the scheme also offers a cashback of NZ$2,000, if the said property is environmentally- feasible, and the makers can show through their projection that the property being built is of Homestar rating 6, or higher. This would promote building eco-friendly homes in the long run, which will help in reducing the indelible mark that humans are leaving on the world in the form of carbon.

Till a few years ago, these incentives may have probably not meant as much as they currently do. COVID-19 while did not have an expected negative impact on people not investing in property, it brought about a magnanimous surge in prices. There are also other factors such as timber shortage and the reluctance of people to make too many site visits, due to which the prices have gone up manifold. It would be interesting to see how the new developments will steer the market in the near future.

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