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

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news