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

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news