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Mortgages

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Mortgage approvals growing but nowhere near boom levels

Mortgage approvals data is showing an increasing number of home loans being approved but nowhere near to the extent implied by credit reporting agency Veda Advantage's latest figures.

Wednesday, March 7th 2012, 4:42PM 1 Comment

by Jenny Ruth

Reserve Bank figures show mortgage approvals rose to 6,669 in the week ended March 2, up from 6,409 the previous week. In the 13 weeks ended March 2, approvals were up 14.3% on the same 13 weeks last year.

However, back near the peak of the boom in late 2006 and late 2007, weekly approval numbers of 10,000 plus were common and there were several weeks of more than 11,000.

Approved mortgages aren't necessarily drawn down.

Veda's data showed more applications for mortgages in December, January and February than at any time since 2005.

Darren Gibbs at Deutsche Bank says Veda's figures count only that part of the market for which banks requested credit reports and there were far fewer such requests during the boom than now.

"There's no way house sales in the next month are going to be anything like what they were seven years ago," Gibbs says.

Robin Clements at UBS New Zealand concurs, saying lending criteria was definitely much easier during the boom.

"The approvals trend is heading in the right direction but from low levels," Clements says.

The central bank's figures also show that household credit growth remains extremely subdued. In January, it was just 0.1% in seasonally adjusted terms, the same level as in December, and that monthly growth ranged from zero to 0.2% all through last year.

Gibbs says credit growth is very minimal relative to the pickup we're starting to see in the housing market.

"That basically says to me there are not a lot of first home buyers out there."

Clements says while there may be growth in lending, it seems to be almost matched by repayments. A number of the banks have made similar observations.

« Mortgage applications top pre-GFC/recession levelsTime to fix: Westpac »

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Comments from our readers

On 9 March 2012 at 11:27 am Dirty Harry said:
All that says to me is that the enquiry is there and it's about time the lenders took their feet off the brakes!

Who cares what Deutsche Bank and UBS say? They are hardly influential players in the home loan market. Over here http://www.goodreturns.co.nz/article/976499379/sluggish-mortgage-growth-prompts-aggressive-loosening-of-lending-standards.html it looks like BNZ and Kiwi are the only ones lending, and ASB have got their foot off the brake but are stuck in first gear.

BTW How many of those 10,000-a-week pre-gfc "approvals" were for pre-approvals that went nowhere, or top-ups for cars, boats, holidays, renovations and consolidating all the consumer hp's and plastic cards?
Commenting is closed

 

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online ▲7.75 ▲6.65 ▲6.35 ▲5.99
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.49 6.49 6.49
TSB Special 7.89 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.10 6.09 5.69

Last updated: 20 November 2024 9:45am

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