The country's mortgage lending stock in January 2023 had its smallest annual rate of growth for exactly 10 years according to the latest monthly sector lending figures from the Reserve Bank (RBNZ).
The outstanding mortgage stock rose by just 4.1% in the 12 months to January 2023, which compares with a 10% annualised rate of growth a year ago.
In addition, if the April 2020 lockdown month is discounted, January 2023 has seen the lowest month-on-month percentage growth in the size of New Zealand's mortgage stock since July 2012.
The $613 million increase in total outstanding mortgages (including non-bank lenders), to $346.149 billion represented just a 0.18% rise from $345.535 billion stock figure as of December 2022.
The optimist will say - well at least the mortgage pile is still increasing. But actually in terms of just bank borrowing figures, which the RBNZ puts in a separate data series, these figures show that in January the pile of bank mortgage debt rose by $673 million to $340.208 billion - but within that the stock of mortgages to investors actually shrank by $4 million to $90.036 billion.
The RBNZ said this was the second decrease in the investor mortgage stock pile since the level 4 lockdown in April 2020.
Anyway, back to the figures including the non-bank lenders, the latest month's results are a far cry from not so very long ago when mortgage money was flying out of the door. In March 2021, a little under two years ago, that month saw the mortgage stock increase by over $3.7 billion, which remains the biggest monthly increase in numerical terms.
In terms of the numerical size of the month-by-month increase in the mortgage stock pile, the $613 million increase was the smallest since July 2017 - again if you discount the April 2020 lockdown.
Looking at business lending, the RBNZ said the total business lending stock decreased by a further $754 million in January, which was driven by a $607 million decline in commercial property lending. This drove annual growth down further from 7.9% to 6.7%.
Total agriculture lending stock increased by $226 million, which drove annual growth up from 0.3% to 0.5%. This is actually its highest annual growth rate since December 2019.
Turning to the other side of the equation - the depositors, the RBNZ's latest figures show that in January the total of household deposits dropped by $1.1 billion, which is the first such drop since a similar-sized drop in January 2022.
The fall stemmed from chunky drops in the amounts in transaction and savings accounts.
However, the term deposits pile launched to another new high of $106.593 billion, up from the previous high of $104.987 billion as of December 2022.
11 Comments
Life in bank land will be interesting to watch this year. The first of the rumours as per post above doesn't surprise me. No new turnover = no new profits. In fact, the word banks are a misnomer. They are shareholder profit centres for the top 2% - or SPC2 for short. Although I did like the term banksters first used by the British press in 2007.
I hazard some guesses...
1) Principal reductions will have slowed - as more of any payment will be consumed by interest, so balances stay higher
2) Are more loans on interest only?
3) Less sales means there is less money being created through increased prices and therefore fewer lump sums
4) Top ups - all the banks offering the 'buy your tesla for less interest' etc.
Same i think the total book value will shrink from her in, impossible to lend more in total as the Ponzi collapses. thus there profit must fall, less new biz at lower margins.... I guess hard for marginal lenders to refinance, especially if you are cliff top or flood plane or over leveraged, i think most investors stuck with their lenders and about to get bent over the kitchen table
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