Ten must-know mortgage market facts

Insights from CoreLogic's Kelvin Davidson

By Mina Martin

28 May 2024

Kelvin Davidson (pictured above), chief property economist at CoreLogic, has provided key insights into the current mortgage market.

With the scrapping of first home grants and the indication that mortgage rates will remain high, the focus is on the property lending environment and accessing lower deposit finance.

Here are 10 crucial points:

Steady recovery in lending: April saw a continued recovery in gross new lending, reaching $5.9 billion, marking the eighth rise in the past nine months.
Interest-only lending under control: Interest-only lending is now around 15% for owner-occupiers and 30-35% for investors, significantly lower than in 2015-16.
Average loan sizes: In April, average loan sizes were $545,000 for investors and $555,000 for first-home buyers, with typical deposits close to 20%.
High LVR lending for first-home buyers: About one-third of first-home buyers are getting mortgages with less than a 20% deposit, supported by current LVR rules.
Loosening LVR rules: The low-deposit lending speed limit is likely to rise from 15% to 20%, assisting first home buyers.

^{Source: RBNZ}

Investor benefits from LVR changes: Investors will soon be able to access loans with less than a 30% deposit, easing the current 35% requirement.
Impact of debt-to-income limits: High debt-to-income lending has been less than 10% for both first-home buyers and investors, with formal caps on DTIs expected to slow property portfolio growth.
Repricing existing loans: About 60% of existing mortgages are due to reprice within the next 12 months, with some rates potentially increasing by 0.5% to 1%.
Job losses as a risk: The softening labour market and job cuts could increase repayment stress and non-performing loans, though the starting levels of stress are low.
Substantial housing equity: Many people have significant housing equity, with an overall loan-to-value ratio of around 22%, according to CoreLogic estimates.