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No Spring lift in investor lending

Residential mortgage lending edged up again in August – despite the cooler market and election uncertainty – but investors’ share of that lending is still well down.

Thursday, September 28th 2017, 12:00AM

by Miriam Bell

Total new mortgage lending in August amounted to $5.105 billion, which was up on both the previous two months, according to the Reserve Bank’s monthly lending data.

In July new lending came in at $4.802 billion while in June it amounted to $5.097 billion.

However, August’s new lending was still well down on a year ago: in August 2016 there was a total of $6.107 billion in new lending.

In line with the pick-up in new lending in August, the amount lent to investors also increased slightly.

Investors were responsible for $1.125 billion of new lending in August, as compared to $1.062 in July.

The amount lent to investors in August was also well down on a year ago when investors accounted for $1.759 in new lending.

Further, investors’ share of lending has declined significantly.

In August 2016, investors’ share of total lending came in at around 29% but this August the share of lending going to investors was around 22%.

This means there has been a major drop off in new lending to investors since the Reserve Bank introduced its investor-focused LVRs, which require investors to have a 40% deposit, in late 2016.

BNZ chief economist Tony Alexander recently said that Reserve Bank statistics show the amount of lending being done per month to investors fell by about $1 billion between July 2015 and July 2017.

Meanwhile, the amount of new lending to both owner-occupiers and first home buyers was up noticeably in August 2017, as compared to July.

Owner-occupiers borrowed $3.182 billion of the new lending, which amounts to a lending share of around 62%, while first home buyers account for $740 million of the new lending.

Both investors and owner-occupiers were responsible for a slight lift in the amount of higher than 80% LVR lending in August.

Investors borrowed $5 million at higher than 80% LVR, as compared to $2 million in July, while owner-occupiers borrowed $133 million at higher than 80% LVR, as compared to $126 million in July.

Conversely, higher than 80% LVR lending to first home buyers was down a bit to $192 million in August, as compared to $196 million in July.

The Reserve Bank’s lending data provides a counter-balance to a host of housing market data which shows a cooler housing market.

It indicates that, despite the cooler market and pre-election uncertainty, mortgage lending rose in August for the first time in several months.

This is likely to reinforce the Reserve Bank’s determination to keep the LVRs in place as its recently departed governor, Graeme Wheeler, has said the bank still sees a risk that house price inflation could take off again.

Read more:

LVRs still needed - RBNZ 

No case to end LVRs – S&P 

« DTIs “perversely restrictive” for investors – reportGrowth outlook overshadows OCR call »

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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

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