Bank mortgage approvals highest last week since November 2009 as lower rates and looser lending criteria fuel borrowing

Bank mortgage approvals highest last week since November 2009 as lower rates and looser lending criteria fuel borrowing

Reserve Bank of New Zealand statistics released on Wednesday show there were NZ$896 million worth of mortgage approvals by banks in the week to April 1.

This was highest level of approvals by value since the week to November 20, 2009.

Approvals were up from NZ$824.4 million the previous week and approvals in the last 13 weeks are up 1.4% on the same period a year ago.

This is the first rise from a year ago since January 2010.

Mortgage approvals picked up substantially in the wake of the Reserve Bank's decision to cut the Official Cash Rate by 50 basis points to 2.5% on March 10.

Banks cut their floating rates for new borrowers to around 5.75% later on March 10.

See all bank mortgage rates here.

The central bank has vowed to reverse the monetary policy loosening once the rebuilding efforts in Christchurch after the February 22 earthquake have begun in earnest.

Most economists don't expect the Reserve Bank to begin tightening again until early 2012.

Meanwhile, mortgage brokers report banks have significantly loosened their lending criteria in recent months, increasing maximum loan to value ratios to 95% or higher and allowing larger multiples of lending to income.

Legal fees and other fees are also being dropped as banks strive to revive their lending growth in the wake of a long period of flat to no growth.

Average loan sizes are also larger.

Figures from Barfoot and Thompson for sales in the Auckland region released earlier on Wednesday showed sales volumes increasing sharply in March, with most of the increased activity happening at the upper end of the market as higher salary earners used increased disposable income after income tax cuts to leverage up and buy more expensive houses in the central and North Shore suburbs.

See our article on Barfoot's figures here.

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Yip. The bank (Westpac) lent me 104% of  the price of a flat the other day! Couldn't do enough for me. Things must be desperate, as this wasn't the tune they were whistling 2 years ago. Most likely going to give 25% of it back again and effectivley prepay the next few years of mortgage, but hell, could've done what most do and splashed out on a new car for all they care.

Brace yourselves NZ.

Hell no RDee, don't give the extra money back, thats the deposit for the next house or flat. The best thing is that all these property knockers will be the people that are paying your mortgage for you !

Relaxing ccredit standards, i've heard of that one before, Ouch

 "mortgage brokers report banks have significantly loosened their lending criteria in recent months, increasing maximum loan to value ratios to 95% or higher and allowing larger multiples of lending to income."

Wake up Bollard.....you know this is wrong....you know banks ought to be aiming to discourage this imprudent and dangerous behaviour......why are you not clamping down on this...why are you not doing your job properly?

Oh sorry....of course I forgot....the election is just weeks away and porking fake confidence any way you can is the priority with the RBNZ.....well isn't that just fecken great.

Hi guys, be proactive - don't whinge a bit.

Here is the business opportunity:

1. Look for the house to be sold

2. Pretend to be interested

3. Advertise it to China as "golden opportunity" investment - did not drop a cent in last years - "as good as gold", etc

4. Take their money - with hefty profit

5. Buy the house (bid on auction) or quietly

6. Sell to your overseas buyer

7. Enjoy

Everyone gets what deserves.

We will have plenty of empty houses, rents are higher, and the business is going........

Cheers

Looks like April will be another strong month then.

"interest.co.nz helping you make financial decisions" ... with the NZX gaining and now the property market looking positive due to the low interest rates.  What are people's thoughts ? Given that the simplistic approach is to hold cash when assets such as shares & houses are heading south ... and then to buy those same assets in times of loose money.  Looks to me like a good time to buy  :))    .... what's everyone's thoughts ... hold cash or buy assets ?

Buy assets - asset prices are going one way - sharp north.

and if it does go the other way - down south, this govt will sure bail you out.

And not too long before they bailout the negative equity property investors. 

 

Thanks SK.  That's pretty much my thoughts too.  And that's what I'm doing ... shares & property  ... but not gold :))   I'm a bit of a natural born optimist but must admit I get a bit jumpy sometimes when I read the comments from some elements on this site worried about ChCh bailouts, portugal, govt debt, IMF stepping in, QE2 (keep it coming QE3 & 4), etc, etc .

Bystander: I think this site is largely an anti-property, anti-landlord, anti-entrepreneurial site with hostile commentators mainly advising to hoard cash and predict the end of the world.

Perhaps, the commentators should have been around in China in the 1960s when they shot landlords and business owners for being 'unpatriotic'.

The only advice you'll get from this site is: Save $$ in bank, wait for the crash, then buy property. However, the other advice they'll give you is that mortgage rates will be rising (9% +) next year (always next year!) so therefore never buy a house. 

Socialists always know what's best for everyone else ...

 

 

Dude, it’s all about PEAK OIL! You see when you’re on the downside of an upwards curve its all about the poisson distribution on the right hand side of the slope. The area under the curve is then proportional to P, and it’s all about the P, dude. It’s simple maths mate. Learn it!  Exponential growth is fantasy, once it’s doubled it halves again. You can't argue with the physics.

Gee, thanks so much for that David B ...... but I think I'll stick with the advice from SK & MortgageBelt. 

I like the site ... it has a nice round-up of topical financial information.  And the comments are always good for a laugh (eg Wolly).  When the end of the world does come I would imagine there won't be enough time to post comments here anyway :))

Time to gird the loins so to speak.

The unfortunate thing about these RB figures is that they show the house market looking healthier for the future.

Which means we will have to put up with at least another month of the doom, gloom and despondency brigade telling us the collapse is still on its way.

Until the next report.

 

Our residential house building company has had more enquiry in the last three weeks than we have had in the previous 3-4 months. Building is not the same "impulse" buy as buying existing housing. That seems to indicate that people have made a decision to get on with life-tho I am extremely wary!!

Interesting observation on the back of B and T's figures of last week and another sign the housing market is beginning a slow improvement.