Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ low deposit home lending edges up in April

NZ low deposit home lending edges up in April

By Paul McBeth

May. 26 (BusinessDesk) - The proportion of home lending with deposits of less than a fifth of a property's value edged up in April, a month after the Reserve Bank embarked on lifting interest rates.

About 4.3 percent of new home loans in April were at a loan-to-value ratio of 80 percent or more, up from 3.6 percent in March, according to Reserve Bank figures. Banks loaned $4.67 billion for new mortgages in the month of which $253 million was at an LVR of 80 percent or more and a further $54 million was exempt from the central bank's restrictions. Excluding exemptions, high LVR mortgage lending made up 5.4 percent of all new loans, up from 4.8 percent in March.

Earlier this month, the Reserve Bank said its restrictions on low equity home loans helped limit the potential risk caused by escalating prices in Auckland and Christchurch, leading to an 11 percent drop in the volume of sales at the lower end of the market. The Reserve Bank was expecting a reduction in property sales of between 3 percent and 8 percent, and estimates house price inflation has been slowed by about 2.5 percentage points.

The central bank limited the level of low-equity home loans banks could write from October as a means to take the steam out of a heating property market, particularly in Auckland and Christchurch, without having to resort to early interest rate hikes, which may have fuelled demand for an already elevated currency. Since then, the bank has embarked on a tightening policy, hiking the official cash rate twice to 3 percent. ,

The Reserve Bank said it expects to keep the restrictions in place until at least the end of the year, and won't move until it's confident the housing market is responding to interest rate increases. It anticipates getting more traction from interest rate hikes than the boom in the mid-2000s with more mortgages on floating or fixed rates of less than a year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news