Attempt to Resolve Home Loan Rates Begin
Attempt to Resolve Home Loan Rates Begin
According to the most recent figures from the Reserve Bank, the floating rate mortgages is 61.7 percent of the overall mortgage lending by banks for the month of May, which is a decrease from the 63.1 percent during the month of April.
Consequently, it is the first monthly decrease ever since August of the previous year, in which floating rate mortgages was 56.3 percent of the overall mortgage lending. However, the figures during August a year ago was obviously an irregularity given that the floating rate mortgages percentage had been increasing ever since August of the year 2009, where it was 22.8 percent of the whole.
The size of the shift is happening into the one to two-year fixed rates which make up 13.3 percent of the whole during the month of May, an increase from the 11.8 percent during April and 9.6 percent during February. The most popular were pre-GFC, two-year fixed-rate mortgages.
Based on figures from other central banks, the price war has caused mortgage approvals to extensively increase but credit growth has hardly increased.
There was an increase in the household credit growth of 0.2 percent during May for a third consecutive month and a progress of the zero to 0.1 percent growth observed during the last seven months. On the other hand, the growth during May 2007 was 1 percent and 1.1 percent during May 2006.
According to Nick Tuffley, the chief economist of ASB Bank, the credit growth figures are already the net and are being restrained considerably by insurance payouts in Christchurch but the rebuilding is just starting.
The net mortgage lending increased by only 1.5 percent from that of May in the previous year but the $558 million growth during May was significantly higher than the $343 million growth during April.
In addition, Tuffley said that the growth for the month of May is the highest since October 2009. It is estimated that lending will be even stronger for June.
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