Strong September for home lending
Thursday 24 October 2019
TMM - News
Mortgage lending soared in September, according to Reserve Bank data, as banks loosened serviceability tests.
Total lending jumped to $5.5 billion in September, up from $4.7 billion in September last year and $4.5 billion in September 2017, according to newly-released figures.
Investor lending stayed largely flat at $1.07 billion, up from $1.01 billion in September last year. First home buyers represented $967 million of total lending, up from $821 million in the same month last year.
Other owner-occupiers again dominated with $3.4 billion of the market, up from $2.8 billion in September 2018.
Analysts credited the lending increase to banks' relaxed serviceability rules. Australian regulator APRA abolished its minimum testing rate for banks in August, and the move is acknowledged to have had an impact here.
CoreLogic analyst Kelvin Davidson said: "After a lull in August, mortgage lending activity rebounded strongly in September – again driven by owner-occupiers, but this time with investors also showing signs of life. The figures suggest that the easing of the interest rates used for banks’ internal serviceability tests in late August has had an immediate and significant impact."
Davidson said the strong data could impact the chances of LVR speed limits being loosened in November: "The strength in lending activity in September also starts to put a bigger question mark over the chances that the loan-to-value speed limits get loosened in November."
Comments from our readers
No comments yet
Sign In / Register to add your comment
Getting rid of “no cause” termination notices only serves to protect bad tenants and will have a negative impact on the broader community, not just landlords, according to landlord advocates.
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.
Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.