Banks are becoming more willing to lend, despite the reimposition of loan-to-valuation-ratio restrictions, according to a survey of mortgage advisers.
Economist Tony Alexander's latest survey found a net 16 percent of advisers report more willingness to lend compared to a neutral perception in both October and November and compared to the net 59 percent who reported in June that banks had tightened up on lending.
"This result is important because it signals that the focus of banks with regard to raising minimum deposit requirements is not on crimping credit availability – something definitely not sought by the Reserve Bank – but on making sure the burst of borrowing activity underway does not produce a great number of individuals in dangerous debt situations," Alexander said.
The RBNZ announced in November it was proposing to reinstate LVR restrictions on lending to investors from March 1 next year, but the major banks decided to move immediately to requiring investors to have at least a 30 percent deposit.
Last week, ANZ Bank NZ went a step further and now requires a 40 percent deposit from investors.
One possible impact of the reimposition of LVR restrictions could be seen in the the survey. It also found advisers are getting fewer inquiries from both first-home buyers and investors, while inquiries from existing homeowners returned to October levels after a slump in November.
A net 13 percent of advisers reported seeing more first-home buyers in the market, down from about 30 percent in November and 78 percent in June.
A net 11 percent reported seeing more investors down from 20 percent in November and 51 percent in June.
The survey found no consistent pattern among existing homeowners with a net 17 percent of advisers reporting seeing more of them, up from 7 percent in November and 16 percent in October.
Given the lack of consistency, "it would be hard to argue that the highlighting of strong price rises and frenzied demand might be encouraging any greatly increased number of owners to consider listing their property," Alexander said.
The latest Real Estate Institute national house price index in November rose 15.3 percent from a year ago while the index for Auckland jumped 16.2 percent.
Key themes voiced by the mortgage advisers include their growing frustration with bank processes and inefficiencies, which spilled over to outright anger in a few cases, that December has proved unusually busy and that fear of missing out, or FOMO, is rampant.
The advisers also report valuations are failing to keep pace with the reality of rising prices and that the government's first-home-grants scheme is increasingly pointless because price limits are too low.
The latest survey was of just 54 mortgage advisers but the results are consistent with Alexander's survey of real estate agents and with other housing market data.