Reserve Bank figures show the annual housing lending growth rate has risen to 3.7% from 3.5% in the past month; non-performing housing loans fall for second consecutive month

The banks' mortgage pile has grown by the biggest amount in the past month since early 2022, according to the latest figures from the Reserve Bank.

The RBNZ said the banks' housing lending stock increased by $1.4 billion in September 2024 (to $359 billion), marking its largest monthly increase since January 2022.

Owner-occupier lending increased by $1.1 billion (0.4%) while residential investor lending increased by $311 million (0.3%).

The housing lending annual growth rate rose from 3.5% to 3.7%. That's still low, but it's increasing again.

And there's no doubt the combination of reductions in the Official Cash Rate by the RBNZ, taking it down from 5.5% at the start of August to 4.75% currently, and ongoing reductions in bank mortgage rates, have had an impact.

Meanwhile, separate figures on non-performing loans show that non-performing housing loans fell, just slightly, in September for the second consecutive month.

And this does appear to indicate that the strong rises in stress seen earlier this year and last year may now be alleviating - again with falling interest rates likely to be helping.

The non-performing housing loans remain at just over $2 billion, which is around 0.6% of the total mortgage stock.

The $311 million increase in investor mortgage borrowing during the month took the investor mortgage pile with banks to $92.148 billion.

The increase in September followed a $335 million increase in August, which was the biggest rise in the investor mortgage pile since May 2021. Such figures barely compare with the $1.266 billion of growth the investor mortgage pile experienced in the super-hot month of March 2021 - but do provide further evidence that investor interest is stirring a little after a long period of this grouping being on the sidelines.

With the RBNZ largely expected to cut the OCR by at least another 50 basis-points in its next review on November 27, this means the OCR will end the year on 4.25% or possibly lower.

What the sharp reductions in rates will do for the housing market as we get into summer will be interesting to see.