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Investor lending activity still subdued

New data from the Reserve Bank reveals property investors took a smaller share of overall new mortgage lending in August.

Thursday, September 27th 2018, 5:00AM

by The Landlord

Investors borrowed $1.25 billion last month out of the $5.4 billion lent to Kiwi home buyers, a fall of about 1% of the overall new mortgage lending figure.

They borrowed $1.32 billion out of $5.5 billion in July.

The amount borrowed by investors in August was slightly up on August last year when they borrowed $1.12 billion.

But it was well down on August 2016 when they borrowed $1.75 billion.

Investors' share of new mortgage lending was hovering just over 23%.

This is slightly down on recent months and significantly lower than the high of 35% they hit back in June 2016.

First home buyers, who have enjoyed a resurgence this year, saw a slight dip in borrowing last month, making up $833 million of the $5.4 billion total.

This marked a decline from $910 million last month.

The usual Spring surge is expected to lift property sales during the final few months of the year, yet investor confidence remains subdued, owing mainly to LVR restrictions.

The Reserve Bank's LVR restrictions require investors to have a deposit of at least 35%.

On top of the LVRs, the threat of further regulation to curb investor buying, such as a mooted capital gains tax, have further dampened investor confidence.

The Tax Working Group released an interim report last week stating a capital gains tax looks likely, but that wealth and land taxes were not on its agenda.

It comes despite recent data indicating flattening house prices in Auckland. REINZ data from August revealed prices in the city fell by 0.1% in the year to July. 

Overall, New Zealand house prices rose by 6.2% in the 12 months to July, according to REINZ. But it is generally thought that price growth around the country is slowing.

« Reserve Bank springs surprise with dovish OCR forecastLVR easing talk grows »

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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 ▼3.89 ▲4.05 4.39
ASB Bank Special - ▼3.39 ▲3.55 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 4.02 4.09 4.39

Last updated: 21 November 2019 9:39am

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