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Investor activity down - myvalocity

The number of investors active in the housing market has declined significantly in recent months, new mortgage registration data shows.

Monday, October 31st 2016, 9:00AM

by The Landlord

A sharp decline in new mortgage registrations is evidence the market is starting to soften, according to property valuation website myvalocity.

The website’s September data reveals new mortgage registrations nationwide were down by 21% year-on-year.

Auckland saw the biggest fall in new mortgage registrations: it was down 26.2% year-on-year.

The North Island’s metro centres were also down 15.6% year-on-year, but Wellington and the South Island metro centres went against the downward trend with year-on-year growth of 2.8% in new mortgage registrations.

Myvalocity CEO Carmen Vicelich said the mortgage registration data supported earlier indications that the market was slowing down.

Mortgage registrations are a good indicator of the financial performance of the market as it tracks the behaviour of all active buyers rather than just what is actually selling at the time, she said.

“The sharp decline in mortgage registrations is one of the most interesting trends we have seen for a while as despite good migration, record low interest rates and the price pressure that still exists in the property market, the number of mortgage registrations has consistently declined in recent months.

The decline was not something they have seen before, Vicelich said.

“The property market is, to some extent, seasonal and, traditionally, we expect to see a rise in mortgage registrations in Spring, however this has not been the case so far this year.”

After reaching a peak in October 2015, mortgage registrations declined dramatically between December 2015 and March 2016, before picking up and then declining again.

Vicelich said the trend indicates the Reserve Bank’s additional LVR restrictions coupled with an ongoing lack of supply are having an impact – particularly on investors.

“Our data shows the number of active investors in the market has declined in recent months at a higher rate than any other buyer type.

“The number of active investors in the market is down 19% nationally on the same time last year which indicates the brakes are starting to come on the market.”

This was particularly noticeable in Auckland where investors were down by 35.3% year-on-year, according to the data.

Vicelich said Auckland’s first home buyers were the only sector that saw growth in September: they were up 4% on the previous month.

This indicated that first home buyers might be finding it easier to buy lower priced homes in the region given there are now less buyers in the market.

Overall, the decline in mortgage registrations is also a reflection of the current lack of stock or supply which is lower than the same time last year, she added.

“Less homes for sale means less people moving and requiring new mortgages.”

But, despite a slowdown in property sales, myvalocity’s data shows the building sector remains buoyant with new building consents and renovations across the country significantly ahead of the same period last year.

The myvalocity data comes hot on the heels of last week’s Reserve Bank mortgage lending data which showed a steep decline in investor lending.

However, most industry commentators are questioning just how long the market slow-down will last, given the market has picked up again after the introduction of each previous set of LVR restrictions.

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

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