The big slowdown in mortgage borrowing growth is continuing unabated, according to the latest monthly sector lending figures from the Reserve Bank (RBNZ).
A year ago we were still seeing double digit annual growth in the pile of mortgage stock as the 2020-21 housing boom entered its final stages.
But such growth is now a distant memory and we are now seeing annual rates of mortgage borrowing at levels last seen in mid-2015.
In its summary of the latest figures, the RBNZ said total housing lending stock (for both bank and non-bank lenders) increased by $947 million in October 2022.
"The annual growth rate continues to trend downwards from 5.7% reported last month, to 5.2%," it said.
In October 2021, the annual growth rate was still running at 11.4% at what turned out to be close to the end of the housing boom (with the peak in terms of house prices coming in November 2022.
The latest figures show the total mortgage stock pile was at $343.184 billion as at the end of October.
But while the mortgage growth is slowing appreciably, there's an interesting recent trend that will be worth keeping an eye on.
Separate loans by purpose figures for just the banks, show that a recent perceptible uptick in total personal consumer lending through the banks is continuing.
The summary of these figures provided by the RBNZ showed that total personal consumer lending stock increased by $113 million in October, continuing on the increase of $77 million reported in September.
"All personal consumer lending products increased in October 2022, with term loans increasing $28 million, the largest increase since December 2017," the RBNZ said.
The personal consumer lending stock from the banks is small, at just a bit over $7.4 billion, and has generally been decreasing in recent years. It will be interesting to see if this latest uptick points to some future pattern.
In terms of personal consumer lending stock, including the non-bank lenders, the total stock stood at nearly $13.5 billion as of October, and with the annual growth rate being 1.2%, up from 1.1% the previous month.
As of October 2021 the consumer lending stock was decreasing at an annual rate of over 8% and a year earlier, in October 2020 it was decreasing at over 11%.
10 Comments
I'll double down on my comment above, mortgage growth for the last 12 months has slowed but it has still increased. So to be clear, the value of all mortgages was higher in the last 12 months than it was when the real estate market was going beserk in 2021.
How can the value of all mortgages be higher in the last 12 months, when so fewer houses have been sold and also at lower prices, that the year before,???
Anyone with an explanation?
Seriously million dollar average mortgage are sustainable? If value of we everything keeps on increasing like this then soon a loaf of bread will cost $20.
Is this the kind of economy we want in our country? How many business can pay 100k + average salary and still remain viable?
The over printing of cash and over spending by the governments have created a huge python which has constricting us to certain death slowly and slowly.
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