WELLINGTON, June 9 (Reuters) - Westpac New Zealand WBC.NZ and ANZ ANZ.NZ tightened lending to non-resident mortgage borrowers on Thursday, following the lead of their Australian parents WBC.AX ANZ.AX , to reduce risk in New Zealand's booming housing market.
Westpac will no longer lend to non-resident borrowers paying off mortgages with overseas income, and borrowers on temporary resident visas would only be accepted if they have a local address and New Zealand-based income, a spokeswoman for the bank said in an email.
"The tightening of policy reduces risk and will contribute to further strengthening our home lending portfolio with customers," the Westpac spokeswoman said.
ANZ would require non-New Zealanders using overseas income to live in the properties they purchased, a spokesman said in an email.
The move came as the country's central bank on Thursday reiterated that it was concerned about the hot housing market's risks to financial stability. It held interest rates steady at 2.25 percent partly to avoid stoking the country's housing market any further. Zealand's rate of house price growth is second only to Qatar's, according to the International Monetary Fund, due in large part to low interest rates and an influx of foreign investors and migration.
The central bank had implemented a variety of measures to cool New Zealand's housing market, including imposing curbs on lending and is looking at other methods. NZ has also reduced the acceptable loan-to-value ratio for domestic applicants with foreign incomes to 70 percent of the loan from 85 percent.
Major Australian mortgage lenders including Westpac's and ANZ's parent companies as well as Commonwealth Bank of Australia CBA.AX and National Australia Bank NAB.AX , made similar moves earlier this year.
The banks tightened policies in response to concerns of Australian regulators seeking to control a steep jump in urban property prices and to address concerns over lax lending standards.