In the week of October 18, there were 6077 mortgages issued nationwide. That represents a 2.8% drop in approvals when the most recent 13-week period is compared to the same period the year before.
Compared to the previous 52 weeks, just 5.5% more mortgages were issued, down from more than 11% more in June.
In the same week in 2012, mortgage numbers were 20% up on the year before.
The pattern in the value of approvals is less clear, probably because Auckland’s house prices are still at record highs.
The previous 13 weeks’ loans were worth 4.2% more than the same period the year before.
Banks have slowed their lending in the face of new LVR restrictions. They must keep their low-deposit lending to no more than 10% of their loan books but many are taking an extra-cautious approach while they work out how the new rules will work.
Reserve Bank deputy governor Grant Spencer said there needed to be a supply boost as well as a drop in demand to ease the housing pressure on Auckland in particular.
“The LVR restrictions are intended to reduce the build-up of systematic risk in the New Zealand financial system. They will also potentially reduce the extent of interest rate increases, and hence exchange rate pressure, that may be needed in the coming cycle. The LVR restrictions are also expected to reduce risk in the banks’ balance sheets.”
