May Sees Largest Rise in Housing Lending in Two Years

Highlights:

• Record Housing Lending: Housing lending stock increased by NZ$1.3 billion in May, the largest monthly rise since April 2022, with NZ$6.9 billion lent on new mortgages.
• Surge in Mortgage Switches: Mortgage holders switching banks increased by 31% from the previous year, involving NZ$1.655 billion in loans.
• Market Dynamics: First home buyers’ share of new mortgages rose to 21.4%, while investors' share decreased to 18.9%; owner-occupiers dominated with a 58.3% share.

Significant Increase in Housing Lending

Calidus Resources Limited (ASX: CAI) and its subsidiaries have named Richard Tucker and John Bumbak of KordaMentha as Receivers and Managers following the appointment of Voluntary Administrators by Calidus' Board of Directors on June 28, 2024, by Macmahon Holdings Limited (ASX: MAH). As of June 28, 2024, Macmahon has a net current exposure of about NZ$33.9 million to Calidus at the Warrawoona mine, plus an additional NZ$5.7 million in Calidus equity shares.

Rising Mortgage Values

A total of NZ$6.9 billion was lent on new mortgages in May, marking the highest monthly total since March 2022. The overall mortgage stock, including bank and non-bank lenders, rose to NZ$360.603 billion, with an annual growth rate increasing from 3.1% in April to 3.3% in May, the largest annual rise since March of the previous year.

Banks vs. Non-Bank Lenders

Non-bank lenders saw a decrease in outstanding mortgage stock, dropping to NZ$5.9 billion in May from NZ$6 billion in April. Conversely, banks experienced a significant increase, with their outstanding mortgage stock rising by NZ$1.3 billion to NZ$354.6 billion, the most considerable monthly rise since January 2022. Non-performing loans slightly increased to NZ$1.91 billion in May from NZ$1.901 billion in April, with a yearly increase of NZ$675 million.

Trends in Bank Switching

The number of mortgage holders switching banks surged in May, likely seeking better deals amid rising job losses and living costs. Mortgage switches increased by 31% compared to the previous year and by 34% from April, involving NZ$1.655 billion in loans with an average size of NZ$636,500.

First Home Buyers and Investors

First home buyers’ share of new mortgages rose to 21.4% in May, a slight increase from April but a drop from 24.3% in May last year. Investors’ share decreased to 18.9% from 20.1% in April but increased from 16.9% the previous year. Owner-occupiers continued to dominate, with their share rising to 58.3% from 57.3% in April.

In total, 18,348 mortgages were written in May, a 16.7% increase from April and a 12.9% rise from May last year. The average new loan value marginally increased to NZ$376,553, up 4.5% from a year ago.

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