Record January home lending
Thursday 27 February 2020
TMM - News
Last month saw the highest January home lending volumes since records began, according to the latest RBNZ data.
A total of $4.7 billion was lent for New Zealand home loans in January, a higher figure than any January over the past five years. The RBNZ's data goes back to August 2014.
The figure dwarfed the $4.05 billion lent in January 2019, and the $3.6 billion lent in January 2018, the data shows.
The statistics add further weight to the resurgent housing market, boosted at the back end of last year by a U-turn on capital gains tax and record low official cash rate levels.
Aggressive price wars between mortgage providers have added further fuel to the housing market in recent months, with economists predicting house price inflation of up to 7% this year.
Investor lending, at $951 million, was at its highest level since January 2016, when investors borrowed $1.28 billion.
First home buyers borrowed $889 million, close to investor levels, last month. The FHB figure was the highest January figure on record, and nearly double FHB lending in January 2015, 2016 and 2017.
High LVR lending, of more than 80%, reached $508 million last month, also the highest on record. High LVR lending was just $250 million in January 2018, and $428 million in January last year.
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Housing confidence has been dealt a hefty blow by the Covid-19 crisis with house price expectations plummeting to new lows.
Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
Tales of strife and problems abound in the commercial property world these days, but the impact of the Covid-19 pandemic has not been as devastating for all commercial players.
Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.