Investors have taken their biggest share of monthly mortgage money for nearly four years, latest Reserve Bank (RBNZ) figures show.
The figures show that in January the investor grouping took 22.5% of the $5.131 billion of committed mortgage money. And that's the highest percentage since February 2021, at the tail end of a big surge in investor interest after the RBNZ had temporarily removed loan to value ratio (LVR) restrictions in 2020. (Note, that when first reported, the RBNZ figures for October 2024 had a higher percentage figure - 22.7% - for the investors, but this was subsequently amended down to just 21.6%.)
The $1.153 billion borrowed by investors in January was up some 90% on the $607 million borrowed by this grouping in January 2024.
That compares with an overall increase in the total amount borrowed in January this year compared with January 2024 of 50.3%. (The amount borrowed in January 2024 was $3.413 billion.)
While a 22.5% share of monthly mortgage money for the investors is well down on the up to 35% share this grouping got in the 2014-16 period, it's a fair bit higher than it was for some time. In January 2024 it was just 17.8%.
The investors' share of the mortgage money really started surging in August 2024, with the grouping that month overtaking the amount borrowed by first home buyers (FHBs) for the first time in two and a half years.
As for the FHBs, which as a group have remained active participants throughout the recent downturn in housing activity, they saw their share of the mortgage money drop under 20% in December for the first time since July 2022.
In January 2025 the FHBs took $1.036 billion, a 20.2% share - so an increase. But that's well down on the 25.2% share in December 2023, which to date is the record share for the FHB's in this series, running since 2014.
The $5.131 billion total of committed mortgage money in January 2025 was in fact the highest overall total for a January since January 2021.
Of course not all this money is necessarily 'new' mortgage money as such.
The separate figures provided by the RBNZ on lending by purpose, a more recent data series, break down money being used for house purchases, top-ups and change of loan provider.
There was a big surge in money for change of loan provider in December, but things were rather more quiet on that front in January, although holidays may well have had something to do with that.
The share of the value of new commitments for property purchases increased to 63.9% in January, up from 60.6% in December. The share for changes in loan provider decreased to 22%, down from 25.4% and the share for top-ups decreased marginally to 11.0%, down from 11.1%.
As we've been noting, mortgage customers since particularly the start of 2024 have been going shorter and shorter with their fixed term mortgages in anticipation of lower interest rates.
This has led to the situation where, going into this year, about 55% of mortgage money - over $200 billion worth - was either on floating rates or fixed and due a reset in the first half of 2025. Over 82% of mortgage money (more than $300 billion) is due a reset by the end of this year.
These are big figures. The more than $200 billion of mortgage money to be reset in the first half of 2025 works out at well north of $30 billion a month. Little wonder then that this has already having a big impact on the monthly mortgage figures.
And with customers having followed such a deliberate strategy of going short in order that they could then reset to the lowest rate possible, it's little wonder that many are prepared to switch loan providers to get what they want.
We'll be keeping an eye on these switching figures, month by month as the great reset continues.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.