Mortgage applications top pre-GFC/recession levels

Latest statistics from Veda Advantage show for the hot property buying period of December, January and February more applications for mortgages were made during these three months than at any time since 2005.

Applications for this three month period reached their lowest in 2009 in the wake of the Global Finance Crisis but the trend is now reversed and setting new records.

The Auckland housing market has become very active and this activity will move to other areas.

"These statistics tell us what is coming down the track - there is a lot more heat in the property market and interest is well above pre-GFC levels," Veda managing director John Roberts says.

As part of the mortgage application process lenders obtain a credit report and Veda data shows a 23.05% increase in applications for the three month period (December, January and February 2012) compared with the same period the previous year.

When the month of February is compared with February 2011 applications are up 29.11%. Generation Y is leading the increase in applicants - up 36.55% but this is off low numbers. Applications by Generation X are up 34.58% February on February while Baby Boomer applications increased by 22.04%.

Veda statistics show a cooling in interest for hire purchase and personal loans while applications for credit cards are up slightly.

Mortgage inquiries: Age bands for the month of February, year on year comparison

Comments from our readers

On 7 March 2012 at 9:51 am Terry Meredith said:

Interested to see these figures but this does not necessary mean a surge. As a mortgage broker myself I now find that I am sending the same application to 2 lenders, sometimes 3 now as clients want the best offers presented to them. This was not the case a year ago. So I myself could be generating twice the credit check as I used to- but still one application. I would suggest lenders figures are more accurate.

On 7 March 2012 at 10:03 am John said:

Looking at the tables, I wonder why 2011 figures were so low as they sit between very positive figures for 2010 and 2012?

On 7 March 2012 at 1:21 pm Amused said:

Interesting to hear Terry's comments above that he is placing loan applications for some clients with 2 sometimes 3 different lenders at once? Word to the wise Terry. A simple telephone call to the lenders (or email if you're that way inclined) saves both you and the bank unproductive time spent working on an application that will never be drawn down/settled because the lender wasn’t going to be competitive enough on interest rate and/or professional costs.

If you have clients that want up to 3 different offer letters presented to them then I suggest that they'll also be the kind of client that goes themselves to BNZ or Kiwibank behind your back for another offer again. Whilst I am passionate that I always canvas all the banks/lenders I deal with for the best deal I don't have to place a physical loan application at 3 different lenders to know where the best deal will be! Brokers that fire off applications to multiple lenders just clog up the system for the rest of us quite frankly.

Drawdown ratios are hot topic amongst all the lenders at present (given stories like Terry's above). It's almost certain that lenders will in time start to pay mortgage brokers different commission rates based on the quality of their loan submission and loans actually settled vs. those submitted.

Year	2006	2007	2008	2009	2010	2011	2012
BB	-8.31%	-10.56%	-10.77%	-14.15%	61.93%	0.00%	16.56%
Gen X	-13.83%	-12.46%	-19.09%	-22.24%	58.12%	1.04%	27.22%
Gen Y	3.99%	4.07%	-15.90%	-36.48%	47.09%	-3.05%	34.75%
Total	-9.94%	-10.51%	-14.87%	-19.29%	60.45%	0.07%	23.05%

Year	2006	2007	2008	2009	2010	2011	2012
BB	-4.57%	-16.08%	-10.51%	-6.13%	49.74%	1.02%	22.04%
Gen X	-12.19%	-15.63%	-19.42%	-14.38%	47.05%	1.56%	34.58%
Gen Y	7.39%	-7.15%	-17.15%	-26.50%	32.04%	7.42%	36.55%
Total	-7.46%	-15.36%	-14.92%	-10.73%	48.27%	1.26%	29.11%

Mortgage applications top pre-GFC/recession levels

New Zealanders are applying for mortgages in greater numbers than at any time in the last seven years.

Wednesday, March 7th 2012, 8:48AM 3 Comments

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