PHOTO: March, 2023 figures show you we are in for a slowing of house sales. FILE
The New Zealand housing market has experienced a significant slowdown in the number of mortgage applications for residential real estate in recent times. There are various factors contributing to this trend, including rising interest rates, stricter lending criteria, and a cooling of the property market.
One of the primary reasons for the drop in mortgage applications is the rise in interest rates. Over the past few years, New Zealand has experienced an increase in the cost of borrowing money, with interest rates going up from historically low levels. This rise in rates has made it more expensive for homebuyers to borrow money, reducing their purchasing power and dampening demand for housing.
Another factor contributing to the decline in mortgage applications is the tighter lending criteria imposed by banks and financial institutions. In response to concerns about high levels of household debt, the Reserve Bank of New Zealand has introduced new lending restrictions, including limits on high loan-to-value ratios and stricter requirements for proof of income and affordability. As a result, many prospective homebuyers are finding it more difficult to secure financing, which has further dampened demand for housing.
In addition to these factors, the property market in New Zealand has cooled in recent years, with house prices stabilizing after a period of rapid growth. This cooling trend has reduced the urgency among buyers to enter the market, leading to a decline in the number of mortgage applications for residential real estate.
|Feb 2021||Feb 2022||Oct 2022||Nov 2022||Dec 2022||Jan 2023||Feb 2023|
|Total lending ($million)|
|All borrower types||7,601||5,730||5,582||6,055||5,121||2,775||3,836|
|First home buyers||1,182||954||1,219||1,357||1,110||640||815|
|Higher than 80% LVR lending ($million)|
|All borrower types||591||312||501||567||470||292||363|
|First home buyers||426||211||381||440||369||233||266|
|Less than or equal to 80% LVR lending ($million)|
|All borrower types||7,010||5,418||5,081||5,488||4,650||2,483||3,473|
|First home buyers||756||743||838||918||741||408||549|
|MEMO ITEM: Lending to investors ($million)|
|Higher than 70% LVR lending||390||114||170||157||168||71||119|
|Less than or equal to 70% LVR lending||1,449||944||733||800||744||357||507|
|Higher than 60% LVR lending||1,003||332||326||339||332||148||205|
|Less than or equal to 60% LVR lending||836||725||578||618||580||280||421|
- Individual figures may not sum to the totals due to rounding
- Percentage changes are calculated on unrounded numbers
- You are free to copy, distribute and adapt these statistics subject to the conditions listed on our copyright page.
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