Recovery in mortgage lending expected in next six months

Even if that does not happen immediately, in the RBNZ’s latest six month Credit Conditions Survey, New Zealand’s 15 registered banks think a recovery will be led by owner-occupiers, particularly as house prices are starting to show signs of a recovery and interest rates are at or near their peak.

The survey covers credit conditions between 1 April and 31 September and asks how banks expect they will evolve over the next six months.

Demand for new mortgages continued to fall over those six months, following further increases in borrowing costs and banks’ serviceability test rates.

However, banks reported an increase in the availability of residential mortgage credit over the six months, following materially tighter conditions over 2022.