Weekly mortgage approvals hit highest value for 12 months at NZ$801.9 million

Weekly mortgage approvals hit highest value for 12 months at NZ$801.9 million

Mortgage approvals have risen to their highest level by value in 12 months and highest level by volume since May, according to Reserve Bank data.

The central bank's latest weekly mortgage approval data, for the week to December 10, shows 5,900 mortgages were approved valued at NZ$801.9 million. By volume it's the highest level since the week ending May 14 when 5,990 mortgages were approved and by value it's the highest since the week ending December 18 last year when mortgages worth NZ$876.1 million went through.

The Reserve Bank figures come a day after the Real Estate Institute of New Zealand said property sales and prices bounced in November in a late Spring flush of activity with volumes up, the median price rising and the number of days to sell falling.

However, mortgage approvals are still down 20.2% by volume and 20.9% by value year-on-year based on comparing the most recent 13 weeks of data to the same 13 weeks last year.

The value of approvals for the week to December 10 overtakes the NZ$789.1 million worth approved last week, which was also a fresh high for 2010.

The Reserve Bank data defines an approval as a firm commitment to provide credit for the purchase of housing, which has been accepted by the borrower. It says a commitment exists once the home loan application is approved, and a loan contract or letter of offer has been issued to the borrower. Seven banks respond to the central bank's survey representing about 94% of total housing lending.

The series excludes banks' own customer refinance, the "rolling over" of a fixed rate loan and its subsequent refinancing, business borrowing where the security is the owner’s home, the underlying value of a loan being “topped up” and when a loan is topped up with extra borrowing only the topped up portion is included.

Included in the data is the refinancing of other banks' customers, loans refinanced using a different bank, any loan where the security changes, borrowers selling property where the loan is secured against and purchases another, any loan where the liability holder changes, and existing mortgages held by individuals being incorporated into a family trust or other such special purpose vehicle.

 

 

 

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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.

23 Comments

A piece of 900m2 dirt along our road here in Kaikoura - just sold yesterday for NZ$ 400'000.- ?????????????

Are "Wallstreetbankersandothergreedies" invading NZ or just a Christmas gift for daddy ? We just don't know  -do we - unexplainable !! 

http://www.trademe.co.nz/Trade-me-property/Residential-property/Houses-for-sale/auction-332270266.htm

Walter....you live there...you know the whole place is for sale...auctions are public games staged to impress punters dumb enough to believe anything.

That doesn't seem an unreasonable price given the property's position and the fact it did include a 4 bedroom house of some description.  The comparables QV list tend to suggest that $400k was an acceptable price and there are two other listings of ordinary houses in the street for late $500s.

To be honest if you were looking at that as land value only, there are probably better bargains out there, but not everyone wants a bargain, a lot of people will pay a good price for the correct property that suits them.

The market at present is still filled with spectacular bargains (even if this wasn't one), maybe you should be looking out for one to suit you?

I do not believe it. Check out the Trademe listings for Kaikoura....it's a scruffy old batch on a standard sized exposed section that just happens to be where a whole heap of other such exposed plots remain unsold for yonks....

Compare it with this.... http://www.trademe.co.nz/Trade-me-property/Residential-property/Houses-for-sale/auction-332263510.htm       now 400k for this one is about right.

The dreamers and the desperate.

Usually the same people.

What can you do when you borrowed a lot of money to pay far too much for a property, only to discover that it's devaluing at a breathtaking pace?

Why, you tell yourself it's not happening, that it's still 2006 or 2007 and EVERYONE wants to buy the property from you at any price.

If you're lucky, you can afford to relist it endlessly with nary a sniff of interest from anyone. If you're not lucky, the bank will eventually mortgagee the place.

 

Not quite sure what you're on about Wolly.  The listing you quote is on at $550k.

The one Kunst quoted might be a scruffy old house but it is on a near level site with unimpeded northern sea views close to the centre of the town on a site that can't be built out.  It's not comparable with subdivision sections for $200k where you would be further out and your view not necessarily guaranteed.  Plus don't forget this property did include a modest 4 bedroom house.

I don't know the Kaikoura market particularily well, but I remember a waterfront property at Gore Bay (near Cheviot for those not from the south) selling at auction in ChCh about 4 years ago for a phenomenal price $600s (I recall), for nothing overly spectacular.  $400k isn't a bargain for the property but is does seem fair for the property on offer.

In saying that I wouldn't be buying that property for that price because I know of plenty of bargains available elsewhere, however it does go to show even in a down market prime property attracts good prices.

Personally, I find it amusing that some people automatically assume that their tidy property down the road is worth considerably more than a "dump" that just sold.  Often an immaculate modern house on a site that is a similar location but which is either steep or where the view is slightly occluded, or on a noisy road, or smaller etc etc is worth little more than that dump on a prime site.  If there were multiple buyers at the auction, it probably reflects fair value (remember that all the buyers would have viewed anything similar that was available).

don't worry Walter, I hear the council are sending the valuers out this afternoon, should be good for a %15 rate rise across the board

The banks desperately want our money and will do just about anything to get it.

And the best way is to fool idiots into mortgage debt, to chase property owned by an earlier sucker for a higher price. Works every time. Same box of pinus rhubarb with a lick of paint. Over and over again...known as milking the idiots.

Chris -the so called 4 bedroom house makes a meal for the bulldozer, a firebrigade exercise or a "Fat Lady Jump" from a Heli.

See my comment above!

...unimpeded northern sea views...

Chris - the owner of the section owns the section in front of the section sold.

 I think the government is desperate for revenue and will ease immigration regulations soon, which means thousand’s more, rather rich people from all over the world are interested on a “NZSafe Heaven” and as a consequence NZproperty market will flourish again.

They better not leave it too long lest there be no more wealthy foreigners left anywhere.

In fact a prime location with a dump of a house can be more sought after than one with a fairly good house as that precludes what can readily be done with the section (I'm not talking about seaside places in Coromandel etc!)

I went to an auction last night with an investor mate of mine on Aucklands North Shore. Six bidders, short notice auction (2 wks) He was happy to pay $390k and it sold for just under $460!

This was a very tired run down house and your still trying to tell me its a buyers market. Yeah Right!

What sort of property was this?

 

May be they can just afford to buy the place mortgage free and develop it because they want to live there?  There's plenty of them about Wolly.  Not exactly the spot in the country I would choose, but hey, not my money.  You want to talk about madness, check out some of the dreamers at Mt Maunganui currently!

I agree with Chris J, not a bad option getting your hands on an old snot box with little or no value and have a blank canvas to work with.  I think I'm one of people that you might dislike...just come back to the country after years away working and looking for the poor buggers who paid to much at the height of the madness. Or am I just pushing up the prices too?   

Could be Ging....oddball sales and what look like scams seem to pop up when the market turns south...wonder why!

The horse is bolting people.

Rubbish SK...as an investment property is like Far Lap.

 

when an ex-state house sells for 860k, some people are making money mate.

not you obviously.

SK. It was a billy basic 3 bedroom, 1 bathroom house on a full 860 sq mtr site. Needed about 20k spent to turn it into a good rental. Locality Browns Bay.

Do you think 460k was reasonable - some subvision potential there probably?

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.