PHOTO: Mortgage lending
Mortgage lending in May wasn’t as strong as we had been anticipating, but the lost ground was well and truly recovered in June, with $5.4bn of new loans on a par with the same month last year. This is yet another indicator which signals a return to some kind of normality in the economy and property market. July and August’s figures may also be relatively healthy, but the end of the wage subsidy on 1st September could signal the start of a weaker trend.
The recovery in mortgage lending activity that began in May was continued into June, with the Reserve Bank (RBNZ) reporting $5.4bn of new loans being made last month. That was up from April’s low point of just $2.7bn, and was pretty much on a par with the same month last year (after declines of 50% in April and 33% in May). Lending to both owner-occupiers and investors showed better results in June (see the first chart).
Generally speaking, media commentary and anecdotal evidence we’ve heard is that the banks haven’t massively altered their attitudes to high loan-to-value ratio lending (even though the speed limits are no longer mandated by the RBNZ), although there still has been a gentle creep upwards in the share of lending being done at >80% LVRs (see the second chart). June’s figure came in at 12.1%.
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