By David Hargreaves
The election appears to have rained on any potential signs of spring bloom for the housing market, with September's mortgage borrowing figures mirroring those seen before the 2014 election and showing a more than $1.2 billion fall when compared with the figures at the same time last year.
And what is worth noting is that the figures at this time last year were already then beginning to be affected and dampened by new Reserve Bank LVR rules.
In fact the latest month's mortgage borrowing figure is a massive $2 billion drop when compared with the boom spring-is-sprung September figures of 2015 - before the latest LVR rule changes.
New Reserve Bank figures highlighting mortgage figures by borrower type for September show that just $4.567 billion was advanced for mortgages in the month. That tallies very closely with the experience seen in 2014 (the election then was September 20 compared with September 23 this year), when just $4.264 billion was borrowed for house purchases.
As we know, the housing market roared back into life after the 2014 election with the normally quiet December month seeing as much as $5.5 billion advanced that year as particularly housing investors celebrated the return of a status quo and housing-speculation-friendly National Government.
Time will tell, but it's much more unlikely we will see a similar pattern this time around. First, the change of Government is likely to make buyers more cautious and second the market has already been crimped by a combination of the Reserve Bank's tough 40% deposit rules for investors and far more conservative lending practices by the banks. Bank economists themselves have used the term 'credit rationing'.
The aforementioned 40% deposit rule officially came into force in October 2016 but in reality the 'spirit' of the new rule was applied by the banks from after the RBNZ announced it on July 19, 2016.
This means that the monthly figures from now onwards are starting to compare with figures from last year that were also impacted by the 40% deposit rule.
Prior to application of that rule investors had been accounting for about a third - or even a bit more - of the monthly borrowing totals, while first home buyers were at times accounting for less than 10%.
By September 2016 the new deposit rules were really starting to bite and investors in that month made up about 26% of the total borrowed - well down on the type of figures they had been borrowing.
The interesting thing is that to this point anyway, there's no particular sign of the investor participation bouncing back, with the percentages hovering around the 22-23% amount.
First home buyers on the other hand are steadily accounting for around 14% of the amounts borrowed each month.
In September 2017 investors borrowed $1.048 billion, which accounted for 22.9% of the total.
The FHBs borrowed $658 million, which represented 14.4% of the total.
The Reserve Bank has expressed satisfaction with how the borrowing figures have been tracking, but has kept warning about the possibility of a resurgence of housing pressures.
But with a new Government promising more houses to be built and potentially fewer migrants coming here, along with a ban on offshore buyers of existing housing stock, such a scenario is looking less likely and questions are likely to be soon asked about whether the RBNZ will be relaxing the LVR rules next year.