By Gareth Vaughan
Housing lending fell in December, month-on-month, for the first since Reserve Bank records began, the central bank's latest sector credit data shows.
The Reserve Bank says mortgage credit fell by NZ$50 million to NZ$170.95 billion in December from NZ$171 billion in November. That's the first monthly absolute dollar decline since the Reserve Bank started collecting the data in June 1998. Previously there had never been a month-on-month drop, with the previous low being an increase of NZ$101 million from September to October last year.
The biggest monthly gain recorded by the Reserve Bank in housing lending was NZ$2.2 billion in March 2007.
The fall in mortgage debt comes after the Real Estate Institute of New Zealand (REINZ) said earlier this month that house sales volumes and prices fell in December - from a weak base - compared with both December 2009 and November 2010 as the number of new sales listings dropped and demand softened. REINZ said the volume of sales in December fell 11.3% to 4,397 from 4,957 in December 2009 and 14.4% from 5,138 in November 2010.
The national median house sale price dropped NZ$8,000 or 2.2% to NZ$352,000 in December from NZ$360,000 in November.
However, despite the monthly fall, mortgage debt was up NZ$3 billion, or 1.8%, year-on-year in December from NZ167.9 billion in November 2009.
Consumer credit did, however, record a NZ$76 million month-on-month increase rising to NZ$11.99 billion from NZ$11.92 billion in November. Over the year it fell by NZ$78 million, or 0.7%, from NZ$12 billion in December 2009.
Business credit, which the Reserve Bank said in last November's Financial Stability Report that it wanted to see modestly grow to help sustain an economic recovery, rose by NZ$1 billion to NZ$73.04 billion in December from NZ$72.03 billion in November. Year-on-year business credit was down NZ$1.4 billion, or 2%, from NZ$74.4 billion.
Meanwhile, agriculture sector debt fell by NZ$220 million month-on-month to NZ$47.81 billion in December from NZ$48.03 billion in November. Year-on-year it rose NZ$692 million, or 1.5%, from NZ$47.1 billion.