PHOTO: Reserve Bank of New Zealand
Whilst new borrowing is down for first home buyers – property investor borrowing is on the increase…
Loan to valuation ratio – new commitments summary
Key points for October 2020:
Total monthly new mortgage commitments were $7.8b in October – the highest month on record since the survey began in 2013. This is an increase of $0.5b (6.3%) from September 2020 and 28.1% from October 2019.
New mortgage commitments to other owner occupiers were $4.4b in October, up from $4.2b in September while new commitments to investors increased from $1.7b to $1.9b.
First home buyers accounted for 17.9% of new mortgage commitments in October, down from 19.1% in September while share of new commitments to investors rose from 22.7% to 24.4%.
The nationwide year-on-year growth in value of new mortgage commitments to first home buyers was 26.6%, while the annual growth in new commitments to investors was 58.8%.
The year-on-year increase of 28.1% in new mortgage commitments was evenly split across Auckland and non-Auckland regions. The annual growth rate for new mortgage commitments in Auckland was 29.9% while areas outside of Auckland grew by 26.6%.
Monthly new mortgage commitments with high loan-to-valuation ratio (LVR)[1] to investors have increased since the restrictions were removed in May 2020. High LVR new mortgage commitments to investors saw a monthly increase of 22.0% in October.
READ THE FULL REPORT HERE: LVR-key-points
