This week we consider the report by the Reserve Bank on the key points for September 2020, which shows total monthly new mortgage commitments were the highest on record since the survey began; an increase of 7.9 per cent from August 2020 and a substantive 32.8 per cent increase from September 2019.
First home buyers accounted for 19.1 per cent of new mortgage commitments, and the share of new commitments from investors rose to 22.7 per cent. With the year-on-year increase of 32.8 per cent in new mortgages, the commitments were largely driven by regions outside of Auckland, with it lifting to 37.2 per cent and Auckland showing a rise of 27 per cent.
There is a clear correlation between the new mortgage commitments and the higher loan-to-value ratio after restrictions were removed in May 2020. The report shows that high LVR commitments to investors increased to 24.3 per cent in September, up from 10.3 per cent in August.
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