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Investor lending remains in check

Restraints on the housing market are still doing their job with new residential mortgage lending down again in April, according to the Reserve Bank’s latest lending data.

Wednesday, May 24th 2017, 11:55PM

by Miriam Bell

It seems that the latest LVRs are continuing to help keep the housing market, and investors, in check – despite the market’s apparent return to form in March.

But March’s stronger market results were followed by a fall in price growth and slower sales activity in April.

And it seems the Reserve Bank’s mortgage lending data has followed a similar pattern.

It shows that total new lending in April was $4.558 billion.

That was down from March – where total new lending soared back up to $5.985 billion, following several months of a decline in new mortgage lending.

But it was in keeping with the new lending totals recorded earlier in the year.

In February, total new lending came in at $4.379 billion while in January it amounted to $3.533 billion.

Of the April lending total, investors were responsible for $1.143 billion, which amounted to around 26% of the total.

This percentage share has been consistent in recent months but, notably, it is well down from the peak of 38% in June 2016.

In line with the drop in total lending, investor lending in April was down on March’s figure of $1.426 billion.

Lending to both first home buyers and other owner-occupiers also dropped in January.

First home buyers accounted for $630 million of the total, while other owner-occupiers were responsible for $2.738 billion.

Higher than 80% LVR lending to investors dropped further in April. It came in at $5 million in January as compared to $8 million in March.

This amount is now significantly lower than it has been in the past. Back in June 2016, the figure was $50 million.

But higher than 80% LVR lending to both first home buyers and owner-occupiers was also down.

Overall, higher than 80% LVR lending amounted to $263 million of the $4.558 billion total.

Interest-only lending dropped across the board in April, as compared to March. But, notably, interest-only lending to investors has declined significantly year-on-year.

Investors were responsible for $1.174 billion of interest-only lending back in April 2016 - which is over double the $568 million they accounted for in April this year.

The Reserve Bank said recently that it is encouraged by the moderation it has seen in the housing market over the last eight months.

April’s mortgage lending data supports the story of ongoing market moderation and, as such, is likely to be viewed favourably by the Reserve Bank and other commentators.

Read more:

Past the peak? 

House price growth slows led by Super City 

Tags: Lending LVR mortgages RBNZ Reserve Bank

« RESIMAC increases loan size limitsRBNZ renews push for DTIs »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.69 4.39 4.45 4.55
ANZ Special - 3.89 3.95 4.05
ASB Bank 5.70 4.45 4.39 4.55
ASB Bank Special - 3.95 3.89 4.05
BNZ - Classic - 3.89 3.95 ▼3.89
BNZ - Mortgage One 6.40 - - -
BNZ - Rapid Repay 5.85 - - -
BNZ - Std, FlyBuys 5.80 4.69 4.59 4.79
BNZ - TotalMoney 5.80 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.49 4.45
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.69 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.79 3.95 3.99 3.95
Kiwibank 5.80 4.80 4.94 4.84
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 4.05 3.99 4.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 ▼4.89 ▼4.99 -
Resimac 5.30 4.86 4.46 4.69
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.99 3.99 3.99
Sovereign 5.80 4.45 4.39 4.55
Sovereign Special - 3.95 3.89 4.05
The Co-operative Bank - Owner Occ 5.65 3.99 3.99 4.15
The Co-operative Bank - Standard 5.65 4.49 4.49 4.65
TSB Bank 5.69 4.55 4.49 4.65
TSB Special - 4.05 3.99 4.15
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.89 3.95 3.95
Median 5.80 4.45 4.42 4.42

Last updated: 20 May 2019 9:09am

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