Auckland specufestors go nuts (again!)

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By Leith van Onselen

Property investors are back in force in Auckland, with the latest data from the Reserve Bank of New Zealand (RBNZ) showing that Auckland investors increased their share of mortgages to 46% in April – the highest level in monthly records dating back to November 2015:

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The share of investors in Auckland is also well up on the rest of New Zealand where investors comprised only 26% of total non-Auckland mortgages.

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According to David Hargreaves at Interest.co.nz:

The new figures are now being collected by the RBNZ from the country’s banks to help monitor the progress of the 30% deposit restrictions placed on Auckland investors from last November.

And the figures clearly demonstrate what has been apparent from recent housing sales data – the restrictions have not dampened Auckland investor activity at all.

The RBNZ basically had to concede as much and has now retreated back to its drawing board, with strong suggestions that debt-to-income ratios are likely to be applied, though not imminently…

The new figures also demonstrate how dominant the Auckland housing market is on the overall New Zealand figures.

In April the $3.536 billion of Auckland mortgages made up 54.4% of the $6.504 billion worth of total new commitments in the whole of the country.

As far as the proportions of investors in the rest of New Zealand, in April the total amount advanced to them was $763 million, which was 25.7% of the $2.968 billion in new mortgage commitments made outside of Auckland.

With all sides of politics seemingly supporting fundamental reform of Auckland’s restrictive land-use and planning system, there is hope for would-be first home buyers in Auckland, but it could take several more years to achieve meaningful reform.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.