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

Development focus for new Hamilton-Auckland partnership

Investors looking for future growth hotspots should keep an eye on the “Hamilton-Auckland Corridor” after New Zealand’s first urban growth partnership was signed on Thursday.

House Prices

Pushing up the national average price

The main centres used to drive New Zealand’s market but it was strong provincial markets that contributed to the national average asking price’s rise in July.

Commercial

Join the office space revolution

Flexible working spaces are more than just a fleeting trend and the launch of a new co-working serviced office franchise programme will open up the market to investors.

Mortgages

OCR cut could prompt housing market upturn

The Reserve Bank’s decision to slash the Official Cash Rate (OCR) by 0.5% to a historic low of 1.0% has shocked the financial community, but what could it mean for the housing market?

Site by PHP Developer