High LVR lending slips to 6.5% of new mortgages in July, Reserve Bank data shows

ASB economist Christina Leung

The proportion of home lending with deposits of less than a fifth of a property's value fell in July amid growing evidence mortgage restrictions imposed by the Reserve Bank last year are succeeding in cooling house prices, especially for cheaper properties.

High loan-to-value lending by banks, those at a loan-to-value ratio of 80 percent or more, fell to 6.5 percent of total new mortgages in July from 6.7 percent the previous month. The ratio of high-LVR lending was 25 percent last September, a month before the Reserve Bank imposed a limit of 10 percent of total home loans, though it has rebounded from as low as 3.6 percent in January and March this year.

"The RBNZ has indicated the effects of these restrictions on the housing market have been greater than it initially estimated," said Christina Leung, economist at ASB Bank. "House price inflation peaked late last year, and we expect further moderation over the coming year as new housing supply comes on board and higher interest rates take effect."

Leung said there is potential for the proportion of new high LVR lending to edge higher as banks adjust to the limits and competition increases in the mortgage market.


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot


Sym Price Change
USD 0.7131 -0.0024 -0.34%
AUD 0.9378 -0.0031 -0.33%
EUR 0.6550 -0.0026 -0.40%
GBP 0.5841 -0.0016 -0.27%
HKD 5.5304 -0.0207 -0.37%
JPY 74.3260 -0.0190 -0.03%


Commodity Price Change Time
Gold Index 1266.0 1.750 2016-10-21T00:
Oil Brent 51.8 0.390 2016-10-21T00:
Oil Nymex 50.9 0.200 2016-10-21T00:
Silver Index 17.5 -0.056 2016-10-21T00:


Symbol Open High Last %
NZX 50 6973.8 6978.9 6973.8 -0.22%
NASDAQ 5290.3 5309.0 5257.4 0.86%
DAX 10743.9 10820.1 10710.7 0.56%
DJI 18197.1 18275.0 18145.7 0.49%
FTSE 7020.5 7067.3 7020.5 -0.49%
HKSE 23431.6 23620.1 23374.4 0.98%
NI225 17216.6 17244.7 17184.6 0.29%
ASX 5430.3 5430.3 5430.3 -0.40%