By David Hargreaves
A slow but perceptible rise in the amount of money borrowed by housing investors has continued, with investors gaining their biggest share of monthly borrowing for over a year in July, according to new mortgage lending by borrower type figures compiled by the Reserve Bank.
After being whacked in mid-2016 by new RBNZ rules meaning they needed 40% deposits, the investors retreated rapidly from a position in which they had been doing something like 35% of the overall mortgage borrowing.
The share of borrowing for investors bottomed out at just under 21% in December 2017.
However, from the start of this year the RBNZ relaxed the rules very slightly, meaning investors needed just 35% deposits, and the share of borrowing by this grouping has been rising very gradually since.
It reached 24% as of last month, which represented the investors' biggest share of the borrowing since May 2017.
In the relative absence of the investors, the first home buyers have been making their presence felt much more - and this is continuing, even as investors start to feature more again.
In July the FHB grouping borrowed 16.5% of the total mortgage money advanced during the month, which was a big bounce back from the 15.1% in June, which itself had been a sharp drop from the record share seen by the FHBs of 16.9% in May 2018.
The total amount borrowed by all groups in July was $5.523 billion, which was an increase of 14.9% on the amount borrowed in the same month a year ago.
In terms of the share of the monies borrowed, the biggest amount was for the owner-occupiers, but this grouping also showed the smallest increase.
In July the owner-occupiers borrowed $3.227 billion, which was an increase of 8.1% on what this grouping borrowed in July 2017.
The $910 million borrowed by the FHBs in July was up some 30.2% on the amount this group borrow in July 2017.
The rise for the investors was similarly chunky.
The $1.328 billion borrowed by investors in July was up exactly 25% on the amount borrowed by this grouping in the same month last year.
What will the RBNZ make of these latest figures?
The central bank has indicated it would not look at further loosening its lending rules till at least November, when it has its next Financial Stability Report due.
Given that the RBNZ has itself recently very much dampened any expectation of interest rate rises in the foreseeable future, it's is unlikely to be in any hurry to further loosen the lending rules at a time when interest rates remain at levels potentially very stimulatory for the housing market.
While bank economists have speculated that another loosening of the rules from the RBNZ will come before the end of the year, the current trend in mortgage borrowing figures - and the slight resurgence of investor interest - would suggest the central bank may play a cautious hand and wait till next year before revisiting any loosening.