Well, New Zealanders, apparently you can have your cake and eat it. You can save money in big dollops, while also borrowing massive amounts to put into houses.
According to deposits data compiled by the RBNZ the amount held by Kiwi households in the bank increased by a further $1.174 billion in August, bringing the amount sitting in bank deposits to $197.5045 billion.
On the flip side of the coin though Kiwis increased the size of the outstanding mortgages pile by $2.142 billion to $287.729 billion, the highest monthly increase in lending since March 2007.
On the deposits, the latest monthly household figure gives an annual growth rate of deposits of 8.7%, which is the highest in four years.
That 8.7% is really neither here nor there, however, since the amount on deposits has increased $13 billion just since the Covid crisis mushroomed in February, which actually gives an annualised growth rate of about 14%.
Figures can deceive somewhat though.
Term deposits are dropping (falling $1.5 billion in August), while all the growth is coming in savings and transaction accounts - which suggests money being 'parked' in expectation it will be needed soon.
But it's also possibly a comment on the non-existent nature of interest on term deposits now.
Then, however, on the other side there's the increased size of the outstanding mortgages pile by $2.142 billion to $287.729 billion, which as said above is the highest monthly increase in lending since March 2007.
It gave an annual increase in the size of the housing debt of 6.5%, which is the highest rate since the 7.1% recorded in March just before the lockdown put a temporary freeze on the housing market.
The RBNZ said annual growth in residential investor lending also overtook growth in owner occupier lending, up to 6.7% versus 6.3% for owner occupier.
At the same time though, annual business lending growth turned negative for the first time in nine years, with business borrowing down $496 million in the month to $117.7 billion, with annual business lending growth dropping -0.5%.
The Reserve Bank gave the following key points for August 2020:
Total housing lending stock rose by $2.1 billion (0.8%) in August 2020 to $287.7 billion, the highest monthly increase in lending since March 2007. Annual growth in residential investor lending also overtook growth in owner occupier lending, up to 6.7% vs 6.3% for owner occupier.
Total consumer lending stock fell by $188 million (-1.3%) in August to $14.7 billion. This included a $120 million drop in credit card lending for banks. Annual growth in consumer lending fell to -11.5%.
Total business lending fell further in August 2020, down $496 million (-0.4%) to $117.7 billion. Annual business lending growth also fell into the negatives for the first time in nine years, down to -0.5%.
Total bank household deposits went up $1.2 billion (0.6%) to $197.5 billion, however this included a $1.5 billion drop in term deposits. Meanwhile transaction & savings accounts went up $1.1 billion and $1.6 billion respectively. Term deposits now make up less than half of total household deposits.