RBNZ figures show that the amount advanced for mortgages in September was the lowest this year so far apart from January, while the amount charged in interest during the quarter climbed to over $3 billion for the first time since 2017
By David Hargreaves
The amount of mortgage borrowing is still flagging, with the latest Reserve Bank figures showing the $5.135 billion advanced in September was the lowest this year - if you discount the always slow month of January.
But separate quarterly figures detailing residential mortgage loan reconciliation show that the amount charged in interest during the September quarter rose above $3 billion for the first time since 2017.
And in fact the $3.21 billion charged during the quarter was the highest figure the RBNZ has recorded since it started this data series in 2014.
With the interest added, it meant that there was some $5.622 billion of scheduled repayments during the quarter - which is also a new high water mark for this series.
Repayment deficiencies were $202 million, which is up quite a bit from $156 million in the previous quarter. However the deficiencies did get well above $200 million and even $300 million during 2021. But nevertheless these figures will be worth keeping an eye on.
However, reflecting what's going on with the monthly mortgage figures, the stock of mortgages increased by just $2.588 billion, which apart from the Covid-affected June 2020 quarter, is the smallest increase in seven years. The stock total stood at $337.395 billion at the end of the quarter.
Going back to the monthly figures, the RBNZ said there were 14,578 new mortgage commitments in September, down 3.5% from 15,109 in August. Compared with September 2021, new mortgage commitments were down 27.0% from 19,961.
And, yes, September 2022 had the lowest number of commitments for a month of September since data collection began in late 2013.
The slightly over $5.1 billion advanced during the month was down some 25.9% on the over $6.9 billion advanced during September 2021 as the previously white hot market was just starting to cool. RBNZ said on a seasonally adjusted basis, the September 2022 figures were down 3% from the August 2022 figures.
Also, RBNZ said the average value of new mortgage commitments across all borrower types fell for a fourth consecutive month, down 1.7% from $358,263 in August to $352,243 in September.
"However, this decline is smaller than those observed in July and August, and the average loan size across all borrower types was still up 1.4% annually," the RBNZ said.
Among the buyer groups the first home buyers are still hanging tough, maintaining a close-to-record share of the monthly mortgage money.
During September the FHB group borrowed $1.064 billion, which represented 20.7% of the total advanced - down just slightly from the record level of 20.8% in August 2022.
Investors are still in large part heading for the sidelines though.
They borrowed just $808 million in September. This meant their overall share of the mortgage money advanced in the month decreased from 16.7% in August to 15.8% - which equalled the record low of this grouping in July 2022.
This story was originally published on Interest.co.nz and has been republished here with permission.