Grim month for home loans
The latest mortgage figures from the Reserve Bank (RBNZ) revealed that the 14,590 new mortgages in June marked the lowest total for this month since detailed data collection began in 2015.
The slump adds to various business figures diving in June, painting a grim picture for New Zealand's economy.
Significant decline in new mortgages
The RBNZ data showed a 6.2% drop in new mortgages compared to June 2023, which had 15,498 mortgages, interest.co.nz reported.
Notably, the housing market wasn’t thriving last year either.
The number of new mortgages in June 2021, during the pandemic frenzy, was 26,048. The highest number recorded for a June month was 33,157 in 2016, 127% more than in June 2024.
Decrease in mortgage amounts
Even the amounts of mortgage money advanced reflected the downturn.
In June, $5.617bn worth of mortgages were signed, down from $5.686bn in June 2023. This is the lowest total for a June month since 2020. At the pandemic peak in June 2021, the mortgage total was $8.526bn.
First-home buyers remain active
First-home buyers (FHBs) took $1.212bn in mortgages, making up 21.6% of the total.
Despite the downturn, FHBs have remained active, taking historically high shares of mortgage money. The 21.6% share in June 2024 was slightly higher than May's 21.4%.
Investors on the sidelines
Investor activity, once dominant, has significantly declined. In 2016, investors grabbed around 35% of mortgage money.
However, in June 2024, investors took only $1.047 billion, or 18.6%. This is slightly up from 16.5% in June 2023 but down from April's 20.1%, suggesting a short-lived rally.
With the housing market slowing down and mortgage numbers dropping, there are calls for banks to consider dropping their rates to stimulate new business, interest.co.nz reported.
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