RBNZ data released this afternoon show total home lending topped $7.3 billion, the highest number on record, going back to 2014.
Last month was the first time lending topped $7 billion since May 2016, and dwarfs the $5.5 billion borrowed in September last year.
The figures underline the stronger than expected comeback in the property market since the nationwide Covid lockdown and second lockdown in Auckland.
Record low interest rates, a shortage of listings, and the end of loan to value ratio restrictions are believed to be behind the surge in housing market activity since the Covid crisis.
CoreLogic's Kelvin Davidson said the figures were boosted by pent-up demand and new demand in the market.
"I suspect there probably is still an element of pent-up demand. The year to date total is pretty much in line with last year, so it’s partly a timing thing, a shift of activity out of Apr and May and into later months. But that’s far from the full story – it’s genuine new demand too."
Investors borrowed $1.6 billion, the highest value since August 2016.
Property investors also borrowed more on high LVR terms (above 70%). They borrowed $611 million, up from $134 million in May, the first month after LVR rules were scrapped.
First home buyer presence remained strong. FHBs borrowed $1.39 billion, up from $1.34 the two months prior.
The figures are likely to give the Reserve Bank further food for thought as it weighs up the impact of its Covid response.
Governor Adrian Orr has said the central bank is looking at investor activity and high LVR investor lending as house prices continue to soar.
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