Latest RBNZ figures show largest number and dollar amount of mortgage approvals since introduction of lending limits

Latest RBNZ figures show largest number and dollar amount of mortgage approvals since introduction of lending limits

Latest Reserve Bank figures indicate that mortgage approvals are starting to rise again after the initial shock impact of the introduction of the RBNZ's "speed limits" on high loan-to-value lending.

According to the RBNZ, in the week to December 6, there were 6922 mortgages approved around the country. This easily topped the previous best total following the introduction of LVRs on October 1 of 6574 mortgage approvals - which was just a week ago.

In the first full week of approvals after the LVR introduction, the number actually dropped below 6000.

In addition the amount approved in the week to December 6, at $1.229 billion, was also the most in the post-LVR period.

This is the busy time of the year for house buying, so it could be expected that the amount of mortgages approved would rise week-on-week.

Therefore, it's worth comparing the trend over the previous four weeks for approvals when comparing those weeks against the equivalent week a year ago.

For the week ending  November 8 there were 6227 approvals, down 10.8% on the equivalent week in 2012, for week ending November 15 there were 6178, down 11.9%, for week ending November 22 there were 6524, down 11.3% and for the week ending November 29 there were 6574, down 14.3%.

In the latest week the figure of 6992 was down just 8.3% on the equivalent period a year ago.

So, this would suggest that while the LVRs are having a marked impact on the number of loans approved, there may be some freeing up of lending activity now occurring as banks get more comfortable with how they are placed in terms of meeting the limit requirements.

Future weeks will be very interesting to watch to see what sort of impact might be measurable from the RBNZ's decision to flip-flop on allowing exemptions for loans on new builds.

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.

5 Comments

Comment Filter

Highlight new comments in the last hr(s).

The net effect of all this tampering is going to be zero.

Apart from injecting a lot of confusion into the market, and into people who hardly need any more uncertainty trying to battle through the auckland property jungle.

REINZ sales down big time in November

News Release 12 December 2013 

 

Weaker Sales Numbers,

 

6,961 houses sold in November 2013, down 6.6% on November 2012 

 

The increase of 2.7% between October and November compares to an average 11.1% increase 

between these two months over the past 10 years, indicating that sales in November were not as high as would be normally 

expected at this time of year. 

 

I notice the 'breaking news' headline here is only focusing on the fact that the median price has risen, ignore that it's because sales volumes at the lower end of the market are down 20%.

The reason the sale only increased 2.7% this year was because all the FHBs are trying to purchase their home before their Pre Approved Loan expires in October. October sale has been abnormally high for this reason.
 
Also, in November, the total sale was 2.7% up from October, Median price has risen 4% in one month, in Auckland, house price inflation has gone up from 12.6% to 14.9% (Whooooooooooop). If you think the lowerend of the market was down 20% then the upper market must have gone up more than 20% else the price inflation will be non-existent.
 
Regards