Investor lending flat in June
Wednesday 24 July 2019
Property Investors borrowed $1.02 billion in June, according to new Reserve Bank data, down from $1.2 billion in June 2018.
Investors accounted for 18.8% of total lending last month, the central bank's latest figures show. This is down from 23.4% last year, according to the RBNZ data.
After they were overtaken by first home buyers in May, investors edged ahead again last month. The data shows FHBs borrowed $926 million last month, which was an improvement on last June when they borrowed $803 million.
The overall picture shows a flat housing market. Home loans totalled $5.4 billion last month, up from $5.3 billion in June 2018, but down from $6.4 billion last month.
High LVR lending to investors remains negligible, despite the loosening of LVR speed limits in January. Investors borrowed just $6 million at an LVR greater than 80%, according to the data.
Kelvin Davidson, an analyst at real estate research firm CoreLogic, said the data showed it was still a tough market for investors.
"Property investing is not as attractive as it has been, with lower yields and the government imposing extra costs. The figures may well have been weaker were it not for the removal of capital gains tax [plans]."
Davidson said the investor figures showed speed limits "have been binding for investors". "You can only put out 5% of your high LVR lending to investors, and anecdotally, we hear banks like to keep a 5% buffer on speed limits. So they are lending nothing. With no access to high LVR lending it's no surprise investor borrowing is restricted."
Comments from our readers
No comments yet
Sign In / Register to add your comment
Property News
Return to market form
There’s been a rallying of the market with the latest REINZ data showing both sales volumes and median house prices noticeably up with the onset of Spring.
House Prices
No stopping Capital price rises
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Commercial
NZ proptech start-up scores major investor
Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.
Mortgages
LVR limits slow down investors
LVR speed limits continue to have a "strong effect" on investors, according to CoreLogic, after the latest Reserve Bank data showed a drop in investor borrowing.
