Growth in mortgage lending slows

Based on their June quarter general disclosure statements (GDSs), mortgage lending by registered banks increased just $1.06 billion in the three months compared with $1.32 billion in the March quarter and $2.02 billion in the June quarter last year.

Reserve Bank of New Zealand figures, which are indicative only since its figures vary considerably from those reported in the GDSs, suggest a further step down in growth in the September quarter this year with bank lending increasing only $0.47 billion in July and August.

During the GFC, quarterly growth sank to just $0.97 billion in the December quarter of 2008 (the $0.05 billion increase in the September 2008 quarter was distorted by Bank of New Zealand being the last of the four major banks to transition from reporting under the Basel 1 rules to the Basel ll rules. The major difference between the two is under Basel l banks included business loans backed by residential mortgages in their totals).

From that point, growth picked up each quarter through to the September quarter of 2009 when mortgage lending grew $2.3 billion.