Housing approvals creep up
The number of housing approvals granted has crept back up to pre-LVR rules levels, Reserve Bank data shows.
Wednesday, March 12th 2014, 11:06AM
by Susan Edmunds
In the last week of February, there were 7059 home loans approved nationwide, worth $1.256 billion.
That is more than were being approved per week during September and August, before the new rules limiting bank lending to low-deposit borrowers kicked in.
It is about 500 fewer than were being issued per week this time last year.
Banks pulled back heavily on their lending after the LVR rules were introduced. They must lend no more than 10% of their new loans to people with a deposit of 10% but have been lending less than 5%.
But over recent weeks, banks have indicated they may be able to start lending to low-deposit borrowers now that they have come to grips with how the rules work in practice.
Bruce McLachlan, chief executive of the Co-operative Bank, said it was hard for banks to work out how much they could lend.
They could estimate at the start of the month how much money should be made available to low-deposit borrowers but it would be affected by how much lending was done in total.
His bank had a target of 8 per cent low-deposit loans but had come in below that each month so far as demand from borrowers with more equity was higher than expected.
In January, the co-operative had lent a little over 6 per cent of its new loans to low-deposit borrowers.
| « BNZ removes high rates for low equity loans | OCR up 25 basis points » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
