Less money lent in low-deposit mortgages
The amount of money lent to low-deposit mortgages continues to fall following a clampdown by the Reserve Bank.
The central bank's monthly figures for January show $147 million worth of mortgages with high LVRs, "loan-to-value" ratios, was approved by banks.
That's down from $252m in December and $1.187 billion in September, the month before the changes came into force.
The value of high-LVR mortgages exempted from the Reserve Bank changes has also been steadily falling to $31m in January, $12m less than December.
High-LVR mortgages are those where the borrower has less than 20 per cent equity in the property. The Reserve Bank moved in October to limit LVR mortgages to keep the banking system stable and cool the housing market.
Before the changes, high LVR mortgages made up 25 per cent of total mortgage loans. In January, that proportion has fallen to 4.8 per cent including exemptions.
Bank of New Zealand chief economist Tony Alexander said it was still early days but the Reserve Bank's mortgage curbs appeared to be having an impact on house sales.
"We can see the turnover is down 10 per cent seasonally adjusted, but I'm still a bit dubious about how much of an effect it's had on price yet," he said.
His monthly survey of real estate agents indicated the housing market had shifted back to being a seller's market, but first-home buyers had clearly backed away.
The most-recent sales figures showed house sales worth less than $400,000, had taken a hit.
"My expectation is as the year goes by, as the labour market gets stronger, as those first-home buyers get used to the new regime, find alternative sources of finance etc, that the housing market will generally be moving back up again," Alexander said.
"However, the Reserve Bank's actions have biased the market more towards investors, be they domestic or be they overseas, and their actions will contribute to the home ownership rate in New Zealand falling through to the next census."