Interest-only lending contained: CoreLogic

In its latest weekly update, real estate researcher CoreLogic notes interest-only lending is way down from historical peaks of roughly 40%. Interest-only lending investors and owner-occupiers has fallen steadily since January 2016, according to RBNZ data.

CoreLogic senior research analyst Kelvin Davidson (pictured), says the low figure indicates banks have "contained" interest-only facilities, despite recent moves from Australian regulators to loosen IO restrictions.

In December, the Australian Prudential Regulation Authority relaxed interest-only restrictions, which had limited the facilities to 30% of overall mortgage lending. The move was designed to breathe some life into the Aussie market, which has plummeted in major centres like Sydney and Melbourne. 

Advisers believe Australian restrictions have influenced New Zealand's major banks in recent years, with the big four Australian-owned. They hope loosened rules will lead to a more receptive attitude from New Zealand banks.