This week we look further at the report by The Reserve Bank relating to the total monthly new mortgage commitments, which were $3.7 billion in September 2020. This is the highest month on record since surveys began in 2013. It shows an increase of 7.9 per cent from August 2020 and 32.8 per cent from September 2019. Clearly, there is a high demand from new mortgage lending that is having an effect on the number of sales occurring.
When we look at the individual markets, new mortgage commitments to first home buyers were $1.4 billion in September, up from August this year, while other owner occupiers increased from $3.9 billion in August to $4.2 billion in September. The makeup of the new mortgage commitments saw first home buyers account for 19.1 per cent of all new mortgages, while investors continue to rise to 22.7 per cent. The year-on-year growth for first home buyers was noted as 44.3 per cent, while commitments to investors were up a staggering 54.7 per cent.
In an article by interest.co.nz, they note this week that HSBC has pushed their fixed home loan offers lower yet again, with some of the market-leading lower levels for their individual products. Aside from Heartland Bank, HSBC has reduced their 12-month and 18-month rates to 2.25 per cent. This is lower than any other bank, other than Heartland Bank, which is offering an online special of 1.99 per cent for one year. With interest rates remaining at such low levels, there is an expectation of continued borrowing, which is creating momentum. As interest rates continue to fall, the reduction in mortgage payments continues to occur, albeit it is less and less material for most household budgets.