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Investors’ mortgage lending share up

New Reserve Bank lending data leaves little doubt that investors are busy in the current market.

Thursday, May 26th 2016

Investors appear to have adjusted to the Auckland-investor focused LVRs introduced by the Reserve Bank last November.

The Reserve Bank’s latest residential mortgage lending statistics show that investors have shrugged off any lingering wariness and are a dominant force in the market.

Their share of the new lending total increased in April.

Total new bank lending in April was $6,504 billion. This was down on March’s record high of $6,572 billion.

Investors accounted for $2,386 billion of April’s new lending. This was up on the $2,322 billion that went to investors in March.

Owner-occupiers remained the biggest group of borrowers, claiming $3,260 billion of April’s new lending. But this was a decrease from the $3,408 billion they borrowed in March.

The share of the new lending that went to first home buyers also went up.

First home buyers borrowed $789 million in April. This was up on the $753 million they accounted for in March. 

Within April’s new lending, there was a total of $493 million higher than 80% LVR lending. This was down on $517 million of higher than 80% LVR lending borrowed in March.

Investors’ accounted for a lesser share of the higher than 80% LVR lending than either owner-occupiers or first home buyers.

They borrowed $46 million of the higher than 80% LVR lending total, which was up on $42 million they were responsible for in March.

While owner-occupiers ($206 million) and first home buyers ($241) accounted for more of the higher than 80% LVR lending, both groups share of the total dropped in April.

Total lending to investors is divided into two further categories: higher than 70% LVR lending and less than 70% LVR lending.

Higher than 70% LVR lending to investors rose again. It came in at $780 million in April, as compared to $773 million in March.

However, the bulk of April’s lending to investors was less than 70% LVR lending. It came in at $1,606 billion, which was up on March’s $1,549 billion.

The Reserve Bank also now provides data which breaks down total new lending commitments into Auckland investors, Auckland non-investors, and non-Auckland borrowers.

This breakdown shows that, of April’s total commitments, $1,623 billion went to Auckland investors, $1,913 billion went to Auckland non-investors, and $2,968 billion went to non-Auckland borrowers.

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