Uncertainty about the outlook for economic activity both locally and globally also contributed to waning demand, which has been falling since RBNZ started hiking its official cash rate (OCR) in October 2021.
The OCR has risen from 0.25% to 5.25% since then.
“Mortgage credit availability had not significantly change, but internal serviceability assessments remain tight due to previous increases in test mortgage rates,” RBNZ said.
“Banks expect demand for household loans to continue to decline over the coming months,” and that would-be borrowers will remain cautious, it said.
The slowdown is broad-based across all types of buyers and in most regions, exacerbated by the higher cost of living and rising building costs.
While credit availability had contracted over the previous two years, it has now stabilised.
“The current economic environment was seeing most banks maintain a conservative lending approach, with affordability assessment using higher assessment rates than seen in recent years,” RBNZ said.
“Banks have been willing to accommodate requests for conversion from principal and interest to interest only to provide relief to customers facing rising debt servicing costs and living costs.”
RBNZ’s index of mortgage demand fell 32.9 points in the latest six months after falling 61.5 in the September half year and dropping 61.7 in the previous March half year.
Banks expect another 25.7 drop in the six months ending September.
The survey was completed in April 2023 by 15 New Zealand registered banks, including the five largest banks.
| « Buy now Alexander tells advisers | Some good and bad news on the inflation war » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved