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Home lending jumps in June

New mortgage lending jumped to $5.3 billion in June as the market recovered strongly from the Covid-19 lockdown.

Friday, July 24th 2020, 3:06PM

The latest Reserve Bank statistics show lending was up from $4.3 billion in May, but slightly down on the $5.4 billion borrowed in June last year. 

The data adds further weight to the theory New Zealand's housing market has recovered strongly from the Covid lockdown. 

First home buyers took a notable chunk of the home loan market in June, borrowing $1.09 billion, up from $926 million in June 2019. 

The share of new lending going to FHBs reached 20.3%, the highest share since the RBNZ started collecting these figures back in 2013, according to Kiwibank.

Investors borrowed just over $1 billion at $1.04 billion, up from $1.02 billion in June last year. 

Home loan issuance has recovered quickly since the pandemic lockdown halted activity in March. Yet housing market analysts warn the figures represent pent-up demand, with house activity frozen over the March/April period. 

The central bank's decision to scrap loan-to-value ratio restrictions continues to boost high LVR lending. 

Total lending above 80% LVR hit $651 million last month, up from $566 million in June last year. 

Kiwibank economists said the share of total lending directed to high LVR borrowers was around 12% over both May and June - the highest rate recorded by the RBNZ.

The strong data tallies up with Real Estate Institute of New Zealand figures, which revealed a stronger-than-expected level of activity in the market.

According to the latest REINZ data, median house prices nationwide were up by 9.2% to $639,000 in June, as compared to $585,000 in June 2019.

They were also up by 3.1% from $620,000 in May 2020.

Likewise, Auckland’s median house prices increased by 9.2% year-on-year to $928,000 in June, as compared to $850,000 this time last year.

However, economists and commentators, including Trade Me's Aaron Clancy, warn the strong winter activity could be a "short-lived sugar rush from pent up demand".

Tags: home loans housing market Lending mortgages REINZ Reserve Bank

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
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 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
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 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 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 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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