1 Comment 1 Commentby Jenny Ruth
Reserve Bank figures show mortgage approvals rose to 6,669 in the week ended March 2, up from 6,409 the previous week. In the 13 weeks ended March 2, approvals were up 14.3% on the same 13 weeks last year.
However, back near the peak of the boom in late 2006 and late 2007, weekly approval numbers of 10,000 plus were common and there were several weeks of more than 11,000.
Approved mortgages aren't necessarily drawn down.
Veda's data showed more applications for mortgages in December, January and February than at any time since 2005.
Darren Gibbs at Deutsche Bank says Veda's figures count only that part of the market for which banks requested credit reports and there were far fewer such requests during the boom than now.
"There's no way house sales in the next month are going to be anything like what they were seven years ago," Gibbs says.
Robin Clements at UBS New Zealand concurs, saying lending criteria was definitely much easier during the boom.
"The approvals trend is heading in the right direction but from low levels," Clements says.
The central bank's figures also show that household credit growth remains extremely subdued. In January, it was just 0.1% in seasonally adjusted terms, the same level as in December, and that monthly growth ranged from zero to 0.2% all through last year.
Gibbs says credit growth is very minimal relative to the pickup we're starting to see in the housing market.
"That basically says to me there are not a lot of first home buyers out there."
Clements says while there may be growth in lending, it seems to be almost matched by repayments. A number of the banks have made similar observations.
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Who cares what Deutsche Bank and UBS say? They are hardly influential players in the home loan market. Over here http://www.goodreturns.co.nz/article/976499379/sluggish-mortgage-growth-prompts-aggressive-loosening-of-lending-standards.html it looks like BNZ and Kiwi are the only ones lending, and ASB have got their foot off the brake but are stuck in first gear.
BTW How many of those 10,000-a-week pre-gfc "approvals" were for pre-approvals that went nowhere, or top-ups for cars, boats, holidays, renovations and consolidating all the consumer hp's and plastic cards?