Mortgage lending on all properties thaws out

For the first time this year the value of new mortgages for home buyers was higher than the same month last year.

The latest Reserve Bank data shows mortgage commitments rose 6.8% from $5.4 billion in August last year to $5.8 billion last month. This was up 15.7% from $5 billion in July or 8.2% when seasonally adjusted.

Mortgage values increased across all loan purpose types. The average value of new mortgages for property purchases at $551,100, up 0.9% from July and changes in loan provider at $590,100, but down 1.7% from July remains significantly higher than the overall average.

The value of loans for top-ups rose to $626 million last month, up 8.2% from July. Similarly, the value of loans for property purchases rose 16.1% to $3.7 billion and the value of loans for changes in loan providers rose 18.7% to $1.2 billion in August.

Total new mortgages for property purchases increased 0.2% from July to 64.6% in August. This share has been increasing since it reached 55.9% in March. New lending for changes in loan provider also increased 0.5% from July to 21.4%.

Lending to first home buyers rose to $1.4 billion, up 10.5% from July and 21.7% from August last year. First home buyers' share of the market dipped slightly to 23.7%, down from a record high of 24.8% in July. However, this is still 2.9% higher than in August last year. The average value of a mortgage taken out by first home buyers is down to $551,400, which is 2% less than in July 2023 and 3% lower than in August last year.

Owner occupiers’ borrowing rose to $3.3 billion, up 17.5% from July and an increase of 0.6% from August last year. Their share of new mortgages rose to 57.8%, up 0.9pp from July 2023 but down 3.6% from August last year.

On the other hand, the share of new mortgages to investors remained steady at 17.1%, the same as in July, but 0.3% higher than in August last year. Investors took out new mortgages totalling $986 million, up 15.6% from July and 9% from August last year.

A total of 15,952 new mortgages were lent by registered banks, up 15.6% from 13,795 in July. In comparison to August last year, the number of new mortgages has risen by 5.6% from 15,109. 

The average value of these new mortgages rose to $362,500, up slightly from $362,200 in July and up 1.2% from $358,300 in August last year.

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