Housing loan approvals jumped 30.6% in the week to December 12 to 9,314, the highest weekly number since June 2007 when the housing boom was at its peak. The value of housing loans approved leapt 33.7% to NZ$1.032 billion, the highest level since the second to last week of December last year. This was the first week after the Reserve Bank's 150 basis point cut in the Official Cash Rate and the first week after 6 month fixed mortgage rates fell to 7%. It's too early to say this big jump represents some turning of the market or signs of a recovery in lending to the household sector. This is the second to last working week before Christmas and is always a busy week as home buyers and bankers rush to complete deals before the Christmas break. However, the volumes and value of approvals in this week were above the corresponding week a year ago (8,480 approvals worth NZ$1.013 billion) and only just below the corresponding week two years ago (11,193 worth NZ$1.491 billion).
There may also have been some pent up lending applications as buyers waited for confirmation of the size of the Reserve Bank's rate cut on December 4. But regardless of these factors, the strength of the gain in the last week does indicate some activity returning to the housing market. Full details are here. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.