By Gareth Vaughan
More home loans were approved last week than in any week since September 2009 with the weekly value the most since April 2009, Reserve Bank data shows.
The Reserve Bank says 7,034 mortgages were approved in the week ending March 16 valued at NZ$1.165 billion.
The last time more than 7,000 mortgages were approved in one week was 7,092 in the week to September 4, 2009. The last time the weekly value was higher was when NZ$1.346 billion worth of mortgages were approved in the week ended April 3, 2009.
The rise in mortgage approvals comes with the Real Estate Institute of New Zealand saying last week there were 6,168 houses sold in February, up 51% from the volume sold in January and up 37% from February 2011. It was the strongest February for sales since February 2008.
However, despite being strong by recent standards, last week's mortgage approvals figures are down on those recorded in the equivalent week of 2007. In the week to March 16, 2007 there were 11,116 mortgages approved valued at NZ$1.542 billion. That week fell during a run of 19 out of 20 consecutive weeks where the value of approvals topped NZ$1 billion with the NZ$1.542 billion of approvals the highest weekly value since the Reserve Bank started tracking the data in October 2003.
By volume, the highest number of weekly approvals was the 11,193 in the week ended December 15, 2006.
Meanwhile, last week's figures were up 17.9% by volume and 40.1% by value annually, based on a comparison of the most recent 13 weeks of data to the same 13 weeks last year.
The Reserve Bank defines a mortgage 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 Reserve Bank's survey, between them representing 99% of registered bank lending for housing, and about 94% of total housing lending.
Included in the data is the refinancing of other banks customers, any loan where the security changes, and any loan where the liability holder changes. Excluded is own customer refinance, business borrowing where the security is the owner’s home, and when the underlying value of a loan is “topped up," with only the topped up portion included. See more detail in the Reserve Bank's description of the data series here
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