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The latest data from the Reserve Bank show that mortgages declined in June after a sharp rise in May.
Wednesday, July 25, 2018, 16:34
by Dan Dunkley
According to figures released today, loan volumes reached $ 5.3 billion last month, roughly comparable to the $ 5.09 billion lent in June The data suggests that the market return spurred by the easing of the LVR rules in January has subsided.
First-time buyers cooled their interest in the New Zealand real estate market after strong growth so far this year. According to the RBNZ, they borrowed $ 803 million, against more than $ 1.1 billion in May
. Government restrictions on real estate investors, including the strict limits of the LVR, have kept investors borrowing in June. Fears over other government measures have dampened investor activity in major New Zealand cities in recent months.
Investor borrowings were in line with June 2017. Investors borrowed $ 1.25 billion last month versus $ 1.21 billion last June. However, volumes were significantly lower than in May when investors borrowed $ 1.5 billion
. The amount of investor loans is the lowest since February, when investors borrowed $ 1.03 billion. In June 2016, investors borrowed more than $ 2.3 billion. Investors took a 23% share of the new credit market in June. Still, this remains well below the 35% of investors in June 2016, while RBNZ has introduced the third round of LVR.
High LVR loans remain rare in the market, the data shows. In total, $ 406 million was borrowed on an LVR of over 80%, which is approximately June 2017, when $ 319 was borrowed.
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