By David Hargreaves
Well, it is finally, officially, official; investors really are buying up a storm in the Auckland housing market.
And despite talk about residential investment taking off in other parts of the country as well, new figures indicate that investors are possibly less prevalent in the rest of New Zealand than might have been thought. It seems for the investor, Auckland is really the only game in town.
The Reserve Bank has for the first time unveiled official figures that break out the Auckland market from the rest of the country's mortgage lending figures. The figures confirm what some previous research and anecdotal evidence has pointed to. Investors are huge in the Auckland market.
The figures show that in April, investors committed to $1.623 billion of the $3.536 billion worth of mortgages advanced in Auckland. That's just a tick under 46% of the total.
This is a considerably higher proportion of investors than can be seen elsewhere in the country.
Despite the anecdotal talk of a lot of Auckland investors now looking elsewhere for bricks and mortar to buy, the ratio of investors in the rest of the country is running at only around 22%-26% month-by month.
The new figures are now being collected by the RBNZ from the country's banks to help monitor the progress of the 30% deposit restrictions placed on Auckland investors from last November.
And the figures clearly demonstrate what has been apparent from recent housing sales data - the restrictions have not dampened Auckland investor activity at all.
The new RBNZ figures go back as far only as November, the month the new LVR rules came in.
According to the figures, in November 2015, investors accounted for 42.6% of the mortgage money advanced in Auckland. This then climbed to 43.1% in December and to 44.8% in January, before easing back slightly to 43.3% in February.
However, in March the proportion climbed slightly again to 43.7%.
Then last month it jumped to 45.9% - the highest percentage since the RBNZ started gathering the information.
There are some exemptions available from the 30% deposit rule, including for new builds and for restorative work, such as on leaky homes. Banks have a 5% 'speed limit' to work to, which enable them to do some lending to people with less than 30% equity in circumstances such as providing assistance to borrowers in hardship.
The April figures show that of the $1.623 billion advanced to investors, $1.345 billion was to investors with a 30% or more deposit, $275 million was in the exempt category and just $3 million was officially outside the 30% deposit cap. This means that whereas the banks can theoretically advance up to 5% of new lending on mortgages to people with deposits less than 30%, just 0.2% was in that category last month - which is in fact the lowest percentage in any month since the new rules came in.
This demonstrates that the investors are seemingly having no difficulty at all finding the extra equity to get mortgages.
The new figures also demonstrate how dominant the Auckland housing market is on the overall New Zealand figures.
In April the $3.536 billion of Auckland mortgages made up 54.4% of the $6.504 billion worth of total new commitments in the whole of the country.
As far as the proportions of investors in the rest of New Zealand, in April the total amount advanced to them was $763 million, which was 25.7% of the $2.968 billion in new mortgage commitments made outside of Auckland.
The non-Auckland investor ratios were worked out by using the Reserve Banks's national lending by borrower type statistics, and by subtracting the Auckland investor totals from the New Zealand investor totals shown in those charts.
These calculations do show that the percentage of properties being bought by investors outside of Auckland has risen somewhat since last November. At that time the percentage was 22.7%, rising to 23.1% in December, falling again to 21.7% in January, then climbing quite steeply in February to 25.9%, edging up to 26.1% in March, then easing slightly to 25.7% in April.
The non-Auckland investor figures, however, remain positively dwarfed by those in Auckland.