By Gareth Vaughan
Kiwis are gorging themselves on bigger mortgages than ever as house prices in Auckland reach eye watering levels.
The latest weekly housing loan approval data from the Reserve Bank shows $1.521 billion worth of home loans were approved last week - the week to Friday, April 24. That's just $21 million shy of the record high in the Reserve Bank series that dates back to October 2003.
The $1.542 billion high point was achieved in the week ending March 16, 2007 with last week's figure the second highest reached to date.
Interestingly, in the week to March 16, 2007 the volume of mortgages approved was 11,116, just shy of the record high of 11,193 recorded in the week ending December 15, 2006.
Last week just 6,922 mortgages were approved.
What that means is the average value of mortgages approved last week was about $219,700, up $81,000, or 58%, from $138,700 in the week to March 16, 2007.
The latest Reserve Bank sector credit figures, meanwhile, show housing debt at $199.697 billion at the end of March, up 4.9% year-on-year.
Red hot Auckland housing
The growth in the average size of new mortgages comes with Quotable Value (QV) figures showing the average Auckland residential property value rose 14.6% in the year to April reaching $809,200.
"The Auckland market has increased 14.6% year on year, 4.3% over the past three months and 48.1% since 2007. When adjusted for inflation values are 14.5% over the past year and are 27.0% above the 2007 peak," QV says.
And the latest Real Estate Institute of New Zealand monthly sales figures, for March, show fresh national and Auckland median house price records, and the strongest sales volumes in any month since May 2007.
In the red hot Auckland market the March median sales price of $720,000 smashed the previous record high by $42,000, or 6.2%. The Auckland median price rose 13% in the year to March, and 11% in the three months to March. And the REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can affect the median price, showed a 20% annual rise in its Auckland Index.
Although the national median price was up $35,000, or 8%, to $475,000 in the March year, when the Auckland effect is stripped out the national median was up just 1.4% year-on-year.
The national Stratified Index, meanwhile, was up 9.5% year-on-year to a record high, and March's 8,803 sales was the highest monthly sales in a March since 2007, and the highest since 9,285 in May 2007. There were 10,989 sales in March 2007.
At $8.8 billion, the value of residential properties sold in March was a new record, smashing the previous high by $590 million, REINZ said.
What's in, what's out
The Reserve Bank defines a mortgage approval as a firm commitment to provide credit for the purchase of housing, which has been accepted by the borrower.
Excluded from the series is own customer refinance, or the rolling over of a fixed rate loan, and its subsequent refinancing; business borrowing where the security is the owner’s home; and where the underlying value of a loan is topped up only the topped up portion is included.
Included is the refinance of other banks customers, IE when a loan is refinanced using a different bank; any loan where the security changes; and any loan where the liability holder changes.
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