About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, November 20th, 6:57AM
rss
Latest Headlines

Downbound trend for investor lending

There is now little doubt that the new LVR restrictions are having a significant impact on property investor activity, with lending in this area slumping to new lows.

Thursday, November 24th 2016, 4:49PM

by Miriam Bell

The Reserve Bank’s October residential mortgage lending data covers the first official month that the LVR requirement for investors to have a 40% deposit has been in force.

It reveals that there has been another big decline in both overall lending and investors’ share of lending.

However, it should be noted that there has been a declining trend in investor lending, as well as overall lending, since May this year.

In October, total new lending came in at $5.37 billion. This was down from $5.83 billion in September.

Investors accounted for $1.45 billion of October’s new lending. That’s a significant drop on the $1.74 billion share of new lending they had in September.

Other owner-occupiers remained responsible for the biggest share of new lending in October, with $3.09 billion. But this amount was down on the $3.30 billion they borrowed in September.

However, first home buyers seem to be taking advantage of the diminished investor presence in the market.

Their share of new lending increased to $768 million in October, as compared to $718 million in September.

After halving between August and September, the amount of higher than 80% LVR lending to investors dropped even further in October.

It came in at $9 million, as compared to $15 million in September. This stands in stark contrast to June when investors accounted for $50 million in higher than 80% LVR lending.

Higher than 80% LVR lending dropped across the board, but the decrease was most noticeable for the investor group.

Not surprisingly, higher than 70% LVR lending to investors also dropped significantly in October. It was down to $18 million from $337 million in September.

Meanwhile, the downward trend for investor lending was also apparent in the Reserve Bank’s data on the Auckland vs non-Auckland market.

In October, new lending in Auckland was down for both investors and non-investors.

Auckland investors accounted for $1.10 billion, as compared to $1.23 billion in September, while Auckland non-investors accounted for $1.67 billion, as compared to $1.84 billion in September.

Non-Auckland lending dropped to $2.60 billion in October, as compared to $2.76 billion in September.

The same story was repeated in the Reserve Bank’s lending by payment type data, which looks at interest-only and principal-and-interest loans.

Interest-only loans accounted for $1.90 billion of total new lending in October, while principal-and-interest loans accounted for $3.47 billion. Both figures were down on September.

While interest-only loans to both investors and owner-occupiers (including first home buyers) dropped, again it was the amount of interest only lending to investors which fell the most.

Investors accounted for $770 million of interest-only loans in October, as compared to $948 million in September. This amount is down to nearly half of June’s figure of $1.42 billion.

Housing market commentators agree that investor activity has quietened down in response to the new LVR requirements, but most question how long the quieter times will last.

 

Tags: banks Lending LVR Macro Prudential Tools mortgages RBNZ Reserve Bank

« New peer-to-peer mortgage provider licensedHeartland Bank to re-enter residential mortgages »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • When is a client really a client?
    “And this subtle upgrade to the understanding of a complaint. Which changes the ISO definition from an expression of dissatisfaction...”
    2 days ago by JPHale
  • When is a client really a client?
    “Just released additional standards from the FMA. Record keeping potentially until 7 years after the death of the life...”
    2 days ago by JPHale
  • When is a client really a client?
    “@ReganT interesting that the two life advisers involved with the code working group discussion are the ones being argued...”
    2 days ago by JPHale
  • When is a client really a client?
    “In a previous reply I responded to the concept of payment as a trigger. I actually agree it’s not. While we don’t often...”
    3 days ago by regant
  • When is a client really a client?
    “Tash are you being deliberately obtuse? I didnt say you have to keep sending/giving disclosure every year, I said you have...”
    3 days ago by regant
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com