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Source: MIL-OSI Submissions
Source: CoreLogic

CoreLogic Weekly Property Pulse with Kelvin Davidson – After a solid month in April, mortgage lending activity dialed back a little in May, with the investor part of the market feeling the pinch. Indeed, owner-occupiers remain the key players in the mortgage market, and in particular first home buyers. That is consistent with the message from the CoreLogic Buyer Classification data. Meanwhile, lending standards remain high – the LVR speed limits for owner-occupiers are not being tested and mortgage repayment problems are very low.

CoreLogic Senior Property Economist Kelvin Davidson comments:

The strength of mortgage lending in April fell away a bit in May, today’s figures from the Reserve Bank (RBNZ) show. Gross new lending in May was $6.47bn, down by about $120m from the same month last year. Again, owner-occupiers have borrowed more year-on-year (up by about $300m), but investor lending remains much more subdued.

The CoreLogic Buyer Classification data also shows something of a divergence between owner-occupiers and investors around the country – i.e. in Auckland, Hamilton, Christchurch, and Dunedin, first home buyers (FHBs) have recently had higher % shares of property purchases than mortgaged investors; something that hasn’t really been seen before, or at least not for several years.

Other detail in the RBNZ’s release shows that average loan sizes for investors are fairly stable, at the $340-350k mark. However, loans to FHBs are getting steadily bigger (see the second chart). FHBs with less than a 20% deposit borrowed $473,373 on average in May, up by close to $25,000 from a year ago (although note that total lending to low deposit, or high LVR, FHBs in May of $480m was only 7.5% of overall activity). FHBs with higher deposits had an average loan size in May of about $384,000, pretty much unchanged from a year earlier.

MIL OSI