The latest Reserve Bank figures show mortgage approvals fell by over 34% in May, 2020 – compared to this time last year.


New Zealand house prices

New Zealand house prices could ‘potentially’ drop worse than 9% – Reserve Bank

 Year-on-year falls in new mortgage commitments were widespread. In Auckland, new
mortgage commitments fell 31.2%, while new commitments outside of Auckland fell 34.9%.

Key points for May 2020:

 Total monthly new mortgage commitments were $4.3b in May. This is an increase of $1.6b
(57.1%), compared with April 2020, but down 33.3% from May 2019.

 New mortgage commitments to first home buyers increased from $0.5b in April to $0.8b in
May and other occupiers increased from $1.7b in April to $2.6b in May.

 First home buyers accounted for 18.5% of new mortgage commitments, up from 17.6% in
April. Investors accounted for 20.7% of new mortgage commitments, up from 20.4% in April.

 In response to the economic impact of COVID-19, the Reserve Bank removed mortgage loan – to-valuation (LVR) restrictions for 12 months, effective from 1 May 2020.

 In May, 14.2% of new mortgage commitments without investment property collateral had an
LVR share of over 80% after exemptions. For investors, 1.5% of new mortgage commitments
had an LVR of over 70% after exemptions.


Previous years:Monthly:
May 2018May 2019Jan 2020Feb 2020Mar 2020Apr 2020May 2020
Total lending ($million)
All borrower types6,5926,4704,7145,5796,1812,7494,318
First home buyer1,1161,1508899381,137484801
Other owner occupier3,8444,1132,8113,4483,6671,6592,586
Business purposes71686358584536
Higher than 80% LVR lending ($million)
All borrower types556707508562624272515
First home buyer376480358371433196355
Other owner occupier17122214418618474153
Business purposes0002100
Less than or equal to 80% LVR lending ($million)
All borrower types6,0365,7644,2065,0175,5572,4773,803
First home buyer740670531567704288445
Other owner occupier3,6733,8912,6673,2623,4821,5852,432
Business purposes71686356584536
MEMO ITEM: Lending to investors ($million)
Total lending1,5611,1409511,1351,319561895
Higher than 70% LVR lending21715213915919084134
Less than or equal to 70% LVR lending1,3439888129761,128477762