Lending on property in smaller town varies. As a general quideline risk insurer companies look for a population of 10k or town located within 10k of major area. This can vary due to nature of town and internal dynamics. eg Tokoroa is a one industry town reliant on Pulp Mill as major employer. With strike about 9 mths to a year ago Carter Holt threatened to close Mill.If this happens town would deterioate. Thus risk is higher and lenders more hesitant. Town has always offered property around $50k and now there are cheaper ones.
Lenders vary eg ANZ has overseas resident criteria where income calculations are made differently to NZ resident.
As a general rule 80% is starting point which can decrease is area classified higher risk.
Strength of application also helps. eg personal income, existing borrowings etc.
There are still areas of NZ that offer positive cashflow that also have growth potential. Purchase price around $70 to $80k. eg $80k at 7.3% = $5840pa. Rent $170 x 52=$8840 Gross return 11%.
Also a bit easier to get finance as potentially better area for lender and higher loan amount for lender profit.
Something to think about!!
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