Last week saw the highest value of new mortgages approved in two and a half years

The latest data for the week of November 18, 2011 saw the highest value of mortgages approved in over two and a half years.

In this latest week $938 million of home loan approvals were reported to the RBNZ. The last time it was this high was May 29, 2009 when $953 million were approved in one week.

However, the number of loans being approved is not at such a high level. In the week to November 18, 2011 there were 5,917 mortgages approved, a level similar to what was seen in mid August 2011.

The rising value along with a fairly stable volume means that the average value being approved has reached the new record of $158,500 per loan.

Approval volumes are growing at 8% year-on-year, while approval values are growing 28% on the same basis. (However it must be remembered these growth rates are off of a low base.)

Clearly, banks are lending to clients who are buying or re-financing with higher value loans. This may indicate that banks are focussing their new lending on wealtheir clients. Or they are focussing their lending on the main centres, especially Auckland and Wellington. Or they are doing both.

The rise in average loan value approvals has been especially evident in 2011 and is notable because it is at least 15% above the levels that were recorded at the height of the real estate price and volume bubble in 2007.

Median house prices peaked after a long and sustained run-up in May 2007, the volume of houses sold peaked in March 2007, and levels have meandered down since then.

But not so the average loan amount.

In perhaps a related observation, the real estate websites Trade Me Property, and realestate.co.nz together reported the highest level of mortgagee sales last week in over a year. (Our chart only displays data from realestate.co.nz, but our internal records show that the level of mortgagee sales listed on Trade Me is the highest we have ever recorded since we started that series in February 2008.)