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Investor lending weak in March

The latest Reserve Bank lending data reveals investors borrowed more than $1 billion in March, the highest figure since November, but a 10% fall on the same period last year.

Tuesday, April 30th 2019, 9:44AM

by The Landlord

Investors took out home loans worth $1.09 billion, more than the $886 million borrowed in February, but a 10% drop on the $1.36 billion borrowed in March 2018.

They remained active despite the threat of a capital gains tax, which has since been ruled out by Prime Minister Jacinda Ardern while she is in power.

Last month's investor numbers leave the market close to 2017 and 2018, when borrowing figures hovered around the $1 billion mark.

Yet the figures are way down on investor market peaks. In mid 2016, investor borrowing regularly topped $2 billion.

Property investors edged out first home buyers again. Those getting onto the property ladder borrowed $999 million last month.

First home buyers are borrowing significantly more than in previous years. The $999 borrowed in March is the highest March figure on record, and the third highest month on record for FHBs.

Property experts, like researcher CoreLogic, say first home buyers are borrowing more, taking advantage of low rates, and stretching to get on the ladder in Auckland, where prices have stabilised over the past year.

In terms of this week's mortgage lending data, CoreLogic senior property economist Kelvin Davidson says there are three key points .

The first is that the value of lending dropped year-on-year – it was a small fall, but still the first since March last year.

"Second, the number of loans is soft, but each loan on average is bigger. And third, banks are still operating well below the LVR speed limits. For those that can pass the deposit, income/expense and serviceability testing hurdles, the competition amongst banks and ‘rate wars’ are still making it a great time to be a borrower."

It's worth noting that the borrowing figures could grow as 2019 continues. Leading economists believe the Reserve Bank will cut interest rates next week, or in August, to boost flagging GDP and inflation figures.

For Davidson, the scrapping of capital gains tax proposals and the prospect of a cut in the official cash rate could help to support the market in the coming months.

 

Tags: banks CoreLogic interest rates investment Lending mortgages property investment RBNZ Reserve Bank

« New flames to fan housing marketIt’s not just about mortgage rates »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 2 August 2021 9:09am

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