The bank says it has fully used the cheap money offered under teh Reserve Bank's funding-for-lending programme.
Overall it drew down $2.9 billion and used nearly half of that to fund its Back My Build home loan product. Over it lent $1.4 billion to fund 4,300 new homes.
In addition to Back My Build, ASB has used the RBNZ funding programme to projects supporting broader sustainability or regional infrastructure objectives. The bank advanced more than $1.3 billion for large businesses that have committed to developing infrastructure and sustainability initiatives and almost $200 million in low-cost rural sustainability lending for farmers making environmental upgrades.
Back My Build was launched in May 2021 with an historically low floating interest rate of 1.79%.
it says the Back My Build interest rate will no longer be available to any applications or top-ups that are not conditionally or fully approved by April8, or available on rollover of existing conditional or full approvals after this date.
ASB Executive General Manager of Retail Banking, Craig Sims, says the initiative has been incredibly successful and importantly, has contributed to addressing critical housing supply issues.
"Back My Build’s played a notable role in boosting the supply of quality new home builds into New Zealand’s constrained housing market. In fact, ASB’s economists are now predicting New Zealand’s housing supply/demand imbalance will be largely resolved by mid-2023,” he says.
The scheme exceeded expectations. At launch the bank forecast it would last for 12 months and fund around 1,000 new builds.
“Just four weeks on from launch, we’d received 3,000 applications for more than $2 billion in lending. As we close, we’ve received more than 11,000 applications, and more than 4,300 builds are underway. Our lending threshold has been reached ahead of schedule due to this overwhelmingly positive response,” Sims says.
Back My Build also encouraged sustainable design by incentivising green design elements to be incorporated into customers’ new builds to meet the New Zealand Building Council’s 6 Homestar rated standard.
ASB will work with customers whose Back My Build applications have been conditionally or fully approved on, or prior to, 8 April 2022 to document their lending by 8 July 2022. ASB is allowing 90 days from the 8 April cut-off date for customers to submit their currently approved Back My Build loans for documentation. This allows the full 90-day approval period for those customers granted a Back My Build approval. While Back My Build is coming to an end, ASB will continue to provide construction lending to those looking to build a new home, lending up to 90% of LVR for residential new home builds.
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