The "sugar rush" from the first lockdown continued last month as mortgage borrowing outstripped the $5.9 billion recorded in July 2019.
The property market comeback came during New Zealand's 100+ days free of Covid-19 transmission, as confidence bounced back after the first period of lockdown.
The Reserve Bank data underlines the strong comeback the housing market made this winter before the second community outbreak in Auckland and second lockdown.
First home buyers secured $1.3 billion in home loans last month, the highest value on record, dating back to 2014.
The second highest borrowing figure for first home buyers was $1.24 billion, recorded in November last year.
Investors continued their comeback in July, borrowing $1.45 billion in the home lending market, their highest figure since May 2018.
There was also a notable increase in high LVR lending, above 80%. High LVR loans hit $796 million, up from $640 million in July 2019. High LVR loans to first home buyers soared to $577 million, up from $447 million in July last year.
While the figures back up strong anecdotal evidence of a recovery in the property market, August's figures are likely to take a major hit from the level three lockdown in Auckland, due to end this Sunday.
Low interest rates are expected to prop up the housing market during the rest of this year and into 2021. The Reserve Bank is widely expected to start a term lending facility with banks and introduce a negative official cash rate to lower retail rates.
Analysis from ASB suggests one and two year fixed rates could drop to 1.5% in the next year, with house prices expected to slump by 2.8% – far less than initially forecast.