NZ Mortgage Lending Slumps 4.9% as Investors Hesitate
New Zealand's mortgage lending numbers are in for August, and they're not looking good. The Reserve Bank of New Zealand (RBNZ) reported that banks approved $7.188 billion in new residential mortgages last month, a decline of 4.9% compared to the same period in the previous year.
While first-home buyers continue to borrow at a steady pace, investors are pulling back. Lending to property investors fell by about 11%, from $1.565 billion in August of last year to $1.398 billion this year. First-home buyers, on the other hand, borrowed almost unchanged amounts at $1.475 billion.
Even excluding refinancing, which shows up as new business for banks but doesn't change total mortgage debt, the annual decline is smaller. Excluding switching, approvals came to $5.381 billion in August, down 3.7% year on year.
The market outlook appears soft, with a median of 51 days to sell and a drop in residential sales by 13%. The Treasury's Pre-election Economic and Fiscal Update has also downgraded its house price forecast and noted that markets now expect the official cash rate (OCR) to rise to around 3.9% by October 2027.