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Source: MIL-OSI Submissions
Source: CoreLogic

Today’s market pulse with Kelvin Davidson, Senior Property Economist, CoreLogic NZ – Mortgage lending in March was higher than the same month a year ago, but the pace of growth has slowed – not surprising, given the increase in economic uncertainty through March and then of course the alert level four lockdown from the 25th. In the months ahead, mortgage lending is likely to weaken further, and the possible removal of the LVR speed limits probably wouldn’t alter that outlook very much.

Today’s Reserve Bank (RBNZ) figures showed that there was $6.2bn of mortgage lending in March, a rise of about $410m from the same month a year ago. That was a solid increase, but still the most subdued figure since August last year – which of course is consistent with the fact that we lost four working days at the end of March to alert level four lockdown. But on top of that, it may also hint at the first signs of a wider COVID-19 driven slowdown in the mortgage market, reflecting caution both by lenders and borrowers.

In terms of the detail, lending to both owner-occupiers and investors eased off in March (see the first chart), while high loan to value ratio (LVR) activity stayed well-contained (see the second chart). In particular, high LVR lending to first home buyers has eased recently, as the third chart shows.