Residential mortgages valued at more than NZ$1 billion were approved last week, the first time the Reserve Bank's weekly measure has topped NZ$1 billion since April 2009.
The Reserve Bank data shows 6,456 mortgages were approved in the week ended December 2 valued at NZ$1.044 billion. At NZ$161,710 the average value was a record high. Last week's figures follow on from the previous week when, in what is traditionally the market's strongest period of the year, 6,112 mortgages were approved valued at NZ$966 million. See full story here.
The 6,456 volume of approvals in the week to December 2 was the highest number since 6,878 approvals almost two years ago, in the week to December 18, 2009.
By volume the approvals rose 8.7% on an annual basis based on a comparison of the most recent 13 weeks of data to the same 13 weeks in the previous year, with the value up 28.9% on the same basis.
The current strong run of mortgage approvals, compared with the last two and a half years' at least, comes as the Reserve Bank leaves the Official Cash Rate at its record low of 2.5% and some economists predict it'll stay there until late 2012 or even into 2013.
The Reserve Bank defines an approval as a firm commitment to provide credit for the purchase of housing, which has been accepted by the borrower. It says a commitment exists once the home loan application is approved, and a loan contract or letter of offer has been issued to the borrower. Seven banks respond to the Reserve Bank's survey, between them representing 99% of registered bank lending for housing, and about 94% of total housing lending. See more detail in the Reserve Bank's description of the data series here.
Mortgage approvals
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3 Comments
That is interesting. That being said, approvals don't equal actual mortgage lending - I've had two approvals granted in recent months, but haven't found a house, and I'm sure I wouldn't be the only one in this situation. What interests me more is the average figure of the approved mortgages - $160,000 isn't enough to buy a house anywhere other than the deep south or far north, and even with a 20% deposit you're only looking at a $200,000 house. As such, I read this as lots of people who're already owning and looking to trade up are getting the necessary finance approved.
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