NZ housing sector lending growth hits record low in October

Total household lending by banks and non-banks in New Zealand rose just NZ$229 million to NZ$174.065 billion in October, a record low for any one month's growth as new housing lending dried up and consumer lending contracted. The annual growth in the year to October of 6% is the lowest on record, slipping beneath the previous low of 6.4% in the year to March 2001, Reserve Bank figures show. The growth in housing lending, excluding consumer lending, of NZ$261 was equal lowest with growth in September 2001. However, new lending to businesses surged NZ$1.452 billion to NZ$79.13 billion in October, due largely to corporates being forced to use emergency bank lending facilities because they were unable to roll over or refinance commercial paper and medium term note programmes. This pushed annual growth in business lending back up to 11.025%, the highest annual growth rate since April. Farm lending continues to barrel along with agricultural sector credit growing NZ$590 million for the month to NZ$42.687 billion, despite a weakening outlook for the dairy sector and falling farm prices, although October is the peak of the dairy season. This forces seasonal financing to handle inventory growth in dairy cool stores. * 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.