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First home buyers’ mortgage market share hits a record

The share of new mortgages to first home buyers rose for the third consecutive month to 24.4% last month, up slightly from 24.3% in May, the latest Reserve Bank figures show.

Friday, July 28th 2023, 9:43AM 1 Comment

by Sally Lindsay

This is the highest share on record. In June last year the share of new commitments to first home buyers was 18.3%.

LVR restrictions were eased at the beginning of last month and anecdotal evidence from real estate agencies is that first home buyers are back in force. A number say first home buyers are wanting to purchase before the election as they believe if the Government changes house prices will start rising the next day.

First home buyers took out mortgages to a total value of $1,385 billion last month, down from $1,422 billion (2.6%) the month before, but up from $1,109 in June last year. During June 2021’s market peak, first home buyers borrowed $1,649 billion.

On the other hand, owner-occupier movers’ and investors’ market share has slumped. Their mortgage lending dropped by 14% and 10.9% respectively compared to June last year.

Lending to investors last month was $939 billion, down from $990 billion in May and also down from $1,054 billion in June last year. During the peak of the market in June 2021, investors borrowed $1,428 billion. 

The share of new mortgages to investors fell from 16.9% in May to 16.5% in June. Annually, the share to investors has fallen from 17.4% in June 2022. The overall lending figures to investors for the first six months of this year are the lowest for a first half year, since 2014. 

Total monthly new mortgages across all borrowers were down $0.2 billion (3%) from $5.9 billion in May. The seasonally adjusted value rose by 7.6% from May.

Annually, the value of all new mortgages has fallen 6.1% from June last year. The figures were lower than in June 2021 ($8.5 billion) – the peak of the market – and June 2022 ($6.1 billion), but slightly higher than June 2018, June 2019 and June 2020 (when they were $5.3 billion, $5.4 billion and $5.4 billion respectively).

Nearly 15,500 new mortgages were taken out last month, down 4.7% from 16,258 in May. In comparison to June 2022, the number of new mortgage commitments rose by 3.7% from 14,952. 

The average value of new mortgages across all borrowers rose to $366,900 in June, up 1.8% from $360,400 in May. The average value has fallen 9.4% from $405,000 in June last year.

The Reserve Bank also collects residential mortgage loan reconciliation data and $4.2bn in interest was paid in the June quarter on residential mortgages. It was the highest since collection of this data began in 2014.

Drawdowns of new mortgage lending were $17.9 billion this quarter, up from $14.5 billion in the March quarter.

Tags: mortgages

« New mortgage lending rises after plunge

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Comments from our readers

On 28 July 2023 at 1:48 pm Amused said:
House prices in New Zealand have fallen due to a lack of affordability. With interest rates now back at historic norms most borrowers simply can’t afford the loan repayments necessary to service the home loan needed to purchase a first home. This is why house prices haven’t stopped falling yet and even once they do, they won’t suddenly start rising again. A change of Government in October won’t make any material difference to the above equation. There may be more interest from investors purchasing residential properties if we see a change of ideology towards landlords and investment properties, but first home buyers are not going to see any relief from high interest rates for the foreseeable future.

It’s a false narrative to say that house prices will start rising the next day following a change of Government.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 15 July 2024 11:47am

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