Household borrowing hit the $200 billion mark last month, according to Reserve Bank figures.
The latest sector credit figures for October - covering the first month since the application of lending limits by the central bank - showed that total household claims hit $200.528 million.
The household claims figure, which includes mortgage borrowing and other consumer borrowing, compared with a revised figure of $199.503 billion for September. Extensive revisions have been made to prior period figures*.
The latest household claims total was up 0.5% on a seasonally-adjusted basis, which is in line with the magnitude of increases in recent months.
On a year-on-year basis the latest figure was up 5.7%, the highest increase since October 2008.
The total outstanding on mortgages rose 6% year-on-year to $186.830 billion, and was up from a revised $185.894 billion in September. The year-on-year increase was again the most since October 2008.
ASB chief economist Nick Tuffley said mortgage lending growth had a strong month over October, notwithstanding the October 1 implementation of high-LVR restrictions.
"As was the case with house sales, a lot of the loans drawn down over the month would have been the result of decisions made prior to the implementation date of the restrictions," he said.
"...We would expect that the effect on overall lending (and the housing market) of the restrictions will become more apparent over November and December, though there is the potential for sub-80% LVR lending to be stronger than it would otherwise be and mitigate the overall impact on the housing market."
Tuffley said there was "little sign" of any negative impact on credit growth of the high LVR restrictions.
"However, at this point the RBNZ wouldn’t be too worried about that specifically: the RBNZ does expect it will take months for the full effects to become clear. Rather, the continued strength in mortgage lending suggests more generally that credit growth has yet to show signs of cooling before the LVR restrictions fully bite."
Agriculture sector borrowing, which has been up and down this year, partly as a result of the earlier drought, fell in the latest month. It was down to $51.910 billion from $52.124 billion, giving a year-on year increase of 4.2%, which despite the drop in the latest month is a slightly higher rate than that recorded for the year-on-year figures to September of 3.9%.
Business borrowing, which has been volatile this year, rose to $78.473 billion from $77.662 billion in September and the year-on-year increase was 2.1%.
*This is the explanation the RBNZ gave for the revisions:
The Reserve Bank today released money and credit statistics for October 2013, which include a number of revisions to previously published results.
The revisions are a result of ongoing system improvements made by several banks affecting customer classification and product allocation.
These revisions affect all periods from December 1990 onward, but are predominantly a change to the level of sector credit with growth rates largely unchanged. There is no change to total credit.
The overall result on sector credit is:
- an increase in the level of agriculture sector lending;
- a decrease in the level of lending to the business sector (mainly in the property and business services industry);
- an increase in consumer lending to the household sector and
- a decrease in NZD claims on non-residents.
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