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.