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New data shows property investor lending way down

Evidence that investors dependent on mortgages are exiting the property market in significant numbers looms large in the latest Reserve Bank data.

Wednesday, July 26th 2017, 12:00AM

by The Landlord

The Reserve Bank has released its residential mortgage lending data for June and it shows that investors’ share of new lending has fallen again.

Total new lending in June amounted to $5.097 billion, which was down on May’s total of $6.036 billion.

Investors were responsible for $1.219 billion of that new lending, as compared to the $1.490 billion they borrowed in May.

The investor lending total also stands in stark contrast to the $2.368 billion investors’ borrowed in June 2016.

Not only was the amount investors borrowed in June down, but so too was investors’ share of lending - which came to around 24% of the total new lending.

Investors’ share of total lending has followed a somewhat bumpy path since the Reserve Bank announced its most recent round of LVR restrictions back in July last year.

In July 2016, investors’ share of total lending came in at 33% and, in the months prior, it had hovered around the 35% plus mark.

But following the announcement of the investor-focused LVRs that share started to plummet and by October 2016 the share of new lending going to investors’ was down to 23.5%.

Since then, investors’ share of lending has fluctuated between 23.5% and 24.5% - bar a small jump to around 26% in April.

In comparison, the share of new lending going to other borrowers remained largely unchanged in June.

Other owner-occupiers were responsible for $3.099 billion of the total lending in June, which equates to a lending share of around 60.5%.

While first home buyers accounted for $713 million of the total lending in June, which is a share of about 14%.

Higher than 80% LVR lending was down across all borrower groups in June, with investors accounting for just $9 million of it.

Higher than 60% LVR lending to investors was also down in June. It came in at $747 million, as compared to $903 million in May.

The Reserve Bank data clearly points to a decline in the mortgage lending going to investors but CoreLogic recently released sales data which adds further definition to this.

It shows that the share of sales to investors have risen in many areas but, given the overall number of sales have dropped almost everywhere, sales to investors have dropped dramatically.

According to CoreLogic senior research analyst Nick Goodall, this is particularly applicable for investors needing a mortgage.

“The strength of the investor share is definitely being held up by those paying in cash, with investors requiring a mortgage dropping much more.”

« OCR held, but for how long?DTIs “perversely restrictive” for investors – report »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

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