More on Re-Balancing Owner-Occupiers against Investors

More on balancing Owner-Occupiers against Investors

RBNZ is giving consideration to making certain investors pay higher commercial rates but have problem with how investors can manipulate their borrowing
The Solution?
Assume ALL loans are commercial by placing a levy of perhaps 2% on the charged rate.
To balance this for an O-O credit back this levy where the O-O can prove occupancy for a minimum time each year.
An O-O can get some benefit for one investment unit by attaching a mortgage to the family home to invest in another property but this is very limiting.
The pressure from such action would ultimately lower property prices and benefit both O-Os and investors who would get a higher yield on fully owned  (unmortgaged investments)

An example
Property value $400k with mortgage $300K at 6%. Rent may be only $450 p.w and relatively already tops. Net return after rates etc is possibly only $3000 p.a.
A 2% levy would add $6000 to an Investor mortgage which would make a considerable difference to cash flow and also nett profit or loss, turning the investment into a loss.
For a proved zero O-O there would be no difference.
However with this in place the property price would fall  (less or no Investor interest) to maybe $350k over time.

At some point the Investor may be able to make a case to buy. Rents are relatively inflexible.
A renter may be able to consider buying with a lower deposit because the value has eased by $50k