By David Hargreaves
The galloping retreat of the housing investor witnessed in October has been repeated - and more so - in November, according to the Reserve Bank's latest monthly borrowing by lender type figures.
The figures show that investors accounted for just $1.091 billion of the $6.224 billion worth of mortgages advanced by both banks and non-banking institutions in November.
That's a share of just 17.5%, which is easily a new low since these figures were first released by the RBNZ in August 2014.
It beats the previous low of 18.7%, which was also easily a new low and which was just in October.
Before the RBNZ clamped down on investors in 2016 by requiring them to front up with 40% deposits, the investors were taking about 35% share of the mortgages advanced.
That dropped fairly swiftly before levelling out in the low 20% region.
It's not clear exactly what has prompted the latest decline, but it has been swift, with the share falling from 21% in September, through that 18.7% and now just 17.5% in the latest month.
All eyes will now be on what happens early next year when from January 1 the RBNZ will be cutting the investors a little more slack, allowing them to front with deposits of just 30%.
But bear in mind that the latest sharp falls in investor participation have come after the deposit limit was relaxed by the RBNZ at the start of this year from 40% to 35%.
The imposition of tough borrowing limits on the investors seemingly gave much more room in the market for the first home buyers.
That trend is very much continuing.
In fact for the first time in November the FHBs came close to borrowing more in dollar terms than the investors, with $1.026 billion advanced to them, representing 16.5% of the total.
It's now the second time this year the FHBs have borrowed more than $1 billion in a month, while the percentage of the total lending that's been going to them has stayed fairly constant in an around the 16.5% level - which is a marked change from before the investor limits were slapped on, when the share was at times in single digit percentages.
The total amount advanced to all borrowers exceeded $6 billion for only the second time this year, and just the third time since November 2016 - when the RBNZ LVRs were really starting to bite.
The RBNZ's separate Sector Lending figures, also released on Thursday, backed up the fact that November was a strong month for lending by recent standards.
The November figures brought the annual increase in the total advanced to 6.1%, up from 6%.
The RBNZ keeps a close eye on this figure and gets concerned if it starts to rise markedly. Having dropped from 9.3% as at December 2016, the rate of growth has just been gradually edging up this year from 5.8% in March.
The RBNZ will be watching these figures after the LVR rules are loosened in January to see whether there is any sharp lift in borrowing.
ASB economist Kim Mundy said mortgage credit growth "remains surprisingly resilient".
"Regional housing markets continue to perform well with strong demand (possibly further bolstered by the recent falls in mortgage rates) and low supply supporting solid price growth. As a result, mortgage credit growth has remained stronger than expected over 2018. Looking forward, the easing Loan-to-Value restrictions may further support demand at the margin."
Mundy said, however, she still expected regional price growth to slowly ease as levels catch up with Auckland prices.
"On balance, we continue to expect mortgage credit growth to continue to slowly trend downwards."