New figures show the previously rapidly rising mortgage borrowing surge has been stemmed; Reserve Bank begins new series of monthly statistics

New figures show the previously rapidly rising mortgage borrowing surge has been stemmed; Reserve Bank begins new series of monthly statistics

By David Hargreaves

The rate of growth in mortgage lending is continuing to slow - something that will please the Reserve Bank

New monthly sector credit figures issued by the RBNZ show that the annual rate of mortgage lending growth in the 12 months to February declined to 8.8% from 9% in January and 9.1% in December.

While these rates of growth are still high compared with recent years, the last few months - coinciding with new RBNZ 40% deposit rules for investors - have seen the previously rapidly rising growth stemmed.

The total of outstanding mortgage lending rose to $232.448 billion as of the end of February, compared with $231.51 billion in January.

Housing and personal consumer finance together grew at an annualised rate of 8.5% in February, down from 8.7% as of January.

The latest figures are included in a whole new series of statistical releases that the RBNZ is putting out for the first time this month, with the information backdated in the releases to provide relevance.

This is the media release the RBNZ put out on the new statistics:

The Reserve Bank today began publishing new monthly statistics that will provide greater insight into the structure and activities of the banking sector.

Head of Macro Financial Stability, Bernard Hodgetts, said the Reserve Bank has worked closely with banks to develop the new statistical collection on the sector’s balance sheets.

“Since the global financial crisis there has been increased demand from the general public, media and financial analysts for more detail in financial statistics, and for these statistics to cover more areas – particularly in banking.”

The new banking statistics include breakdowns of financial instruments, including loans, securities, deposits and borrowings. They replace the existing statistical framework first introduced in the late 1980s, which was known as the Standard Statistical Return.

Statistics manager Steffi Schuster said that, with lending to households now making up a larger share of bank lending, a more comprehensive breakdown of mortgage lending to households is timely. 

“Users will be able to see the banks’ mortgage lending portfolio broken down by payment type, such as interest-only, revolving credit and principal and interest. Residential investor mortgage lending will also now be separately identified.”

Comprehensive sector breakdowns have also been introduced in the collection and aligned with Statistics New Zealand’s Statistical Standard for Institutional Classifications (SCIS). “We have further expanded the business sector statistics to capture data on agriculture, commercial property and other business lending activity. For the first time, business loans fully secured by residential mortgage have been identified,” she said.

The Bank plans to expand the statistical series even further later this year and publish data that provides more detail about bank deposits, as well as lending to the business sector and commercial property sector.

“We understand the importance of data continuity, so some key statistics such as credit have been backdated to provide comparable historical data. Statistics for most new series will be available from the December 2016 month onwards.”

New banking statistics

More information

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Any news on national rents?

An interesting replacement format. I'll have to give it a closer look.

This data should scare all New Zealander's
The debt is increasing at about 8% per year* and GDP about 3.1 percent**
At what point does the debt become unpayable on that trajectory?

Growing debt at a rate greater than GDP is all about transfering wealth upwards. The trickle up effect is more of a river at this point. The debt hangover resulting in severe debt deflation is going to be really bad when it fully kicks in.

I use nominal GDP ( The actual $GDP ) when comparing to credit growth.
Credit is growing at about 8% and GDP is growing at 7.5 %.....

Most of our debt is going into , kinda , "pseudo" GDP growth. ie.. household debt.... so the longer term outlook is more akin to a maxed out credit card , rather than , say, borrowing to grow a business..

Agreed the real story here is the fact that Mortgage Growth is still running at a ridiculously high 8.8%

DubleD you think 12% increase is great try Toronto with a 33%March to March year increase in house prices ! Now that's what you call a giant of a ponzi !
Vancouver cooling off.
Auckland is transitioning from everything going up to sell offs of the lower classes of property and stabilization of the upper classes of property.
The giant debt that requires repayment will prove unmanageable to service by many when interest rates tick
upward as they do quickly in NZ as the Aus banks simply use any excuse to gouge extra profit out of NZ .
Almost like a sport to these Aussie banks

This is the best thing ever. You create $232 bn out of thin air .. than you charge interest ...5% which is $11.600.000.000 per year in interest or $31.868.131 PER DAY (!)

Imagine how much money we could put into economy without that...

Don't fall for the 'out of thin air' line. Yes, money is 'created' in the banking system (read how here), but it is not a system where banks just make stuff up at their whim. (If that was the case, their profits whould be far larger than they are now). There is a real, regulated system at work. Chasing an urban myth will lead you astray. (And it has led many people, including a now-defunct political party down a dead end.)

The imbalances in the system are a direct consequence of the debt based credit being used as if it were money. You can’t correct a debt saturation imbalance with more debt, and that’s the only way the credit being used as if it were money existences, as someone else’s debt. And, that debt based credit’s continued existence is totally dependant upon the ever rising values of the assets backing it, and the solvency of the institutions that administer it, either one of those two fail and it’s !POOF!, 2008, or worse, all over again.

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