First home buyers back in action

The Reserve Bank’s latest mortgage data shows first home buyers' share of new mortgages in April rose to 24.2% – the highest share on record.

The figures were up 3.6% on March and 6.6% more than in April last year. It was the second month in a row the number of mortgages taken out by first home buyers has been higher than the same month last year.

All up, 1,883 mortgages totaling $1,049 billion were taken out by first home buyers, up 6.6% compared to April last year.  Despite a dip in February and March, there has been a general upward trend in the share for first home buyers in the preceding months, the data show.

While mortgage lending across the board fell during April, it was to a lesser extent with first home buyers.  Their borrowing fell from $1,245 billion in March to $1,049 in March. 

However, the increase in lending to first home buyers resulted in investors' share falling to 16.6%, down from 17.7% in March. The share to other owner occupiers fell sharply to 57.6%, down from 60.3%.

Across all borrowers total mortgages lent were $4.3 billion, down $1.7bn or 28.3% from $6 billion in March and down from $5,664 billion in April last year.  

The value of all new mortgage lending was the second lowest on record for an April, with only April 2020 – during the first Covid-19 lockdown – recording a lower value, since records began in August 2013.

The RBNZ says the monthly drop was largely driven by declines in lending to other owner occupiers, which fell $1.1bn or 31.4% to $2.5 billion, and lending to investors, which fell $349 million or 32.7% to $718 million.

In total 12,084 new mortgages were taken out in April, down 27.5% from 16,657 in March. In comparison to April last year, the number of new mortgage commitments fell 13.3% from 13,939.

High LVR lending rose across all borrower types. The share of lending to first home buyers with a high LVR of 80% rose to 32.1%, up from 31.4% in March.

Similarly, the share of lending to other owner occupiers with high LVR of 80% rose to 3.7%, up from 3%, and the share of lending to investors with high LVR of 60% rose to 35.3%, up from 34.7%.

The average value of new mortgages across the board fell slightly to $358,300, down 1.1% from 362,400 in March. The average value has fallen 11.8% from the peak of $406,300 in April last year.

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