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Mortgages

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Investor lending falls to new lows

Mortgage lending to property investors sank to its lowest since 2014 for a December month, RBNZ data shows.

Tuesday, January 30th 2024, 11:00AM

Residential property investors took out $894 million of new mortgages during the month, the smallest amount since records began.

The value of mortgages taken by investors were 63.3% less than December 2020, when the market was booming, and 2.1% less than December 2022.

High interest rates and tax have soured investors’ appetites for property, although the newly elected coalition government is reinstating mortgage deductibility and pulling the brightline test back to two years.

However, this has not been enough to entice investors back into the market in big numbers yet.

On the other hand, first home buyers have been rushing to buy property before investors dip back into the market and compete for houses.

They took out $1.3 billion or 25% of mortgages in December, the highest share to first home buyers since records began in August 2014. The share increased from 21.7% in December 2022.

The share of new mortgages to first home buyers has exceeded the share to investors each month since April 2022.

New mortgages for all borrowers during December came in at $5.3 billion, 3.6% more than in December 2022, but 33.1% less than in December 2021. December last year was the fifth month in a row in which the value of new mortgages surpassed the same month the previous year.

However, the average new loan fell to $353,300 this month, down 4.4% from $369,400 in November. Compared with December 2022, average values across all borrower types have fallen by 1.5% from $358,600.

The share of the value of new commitments for property purchases increased to 66.9% from 64.0% in November. The share for changes in loan providers declined to 17.9% from 20.9% in November. The share for top ups dropped slightly, falling from 11.3% in November to 11.1% in December.

Meanwhile the RBNZ’s intention to introduce debt-to-income (DTI) restrictions and relax loan-to-value (LVR) ratios later this year is expected to have more influence on the market.

Relaxing the LVR rules will mean most investors will need a 35% deposit instead of 40%, which could mean a return to the level of restrictions before the pandemic when a quarter of new investor loans went to those investors with a 30-35% deposit. But the RBNZ says DTIs are only expected to bind when interest rates fall.

Tags: property investment

« Advisers to be beefed up on lending linesDoubling down on OCR cuts being some way off »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance 8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 5.79 5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans ▼5.80 - - -
CFML Home Loans ▼6.25 - - -
CFML Prime Loans ▼7.85 - - -
CFML Standard Loans ▼8.80 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard 7.69 6.69 6.39 -
Heartland Bank - Online 6.99 5.49 5.39 5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.15 ▼6.50 ▼6.30 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 7.39 5.79 5.59 5.69
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 6.69 6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 5.79 5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 5.75 5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - 5.89 5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity ▼9.39 - - -
TSB Bank 8.19 6.49 6.39 6.39
TSB Special 7.39 5.69 5.59 5.59
Unity 7.64 5.79 5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 7.70 5.95 5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.79 5.69 5.69

Last updated: 18 December 2024 9:46am

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