Advisers report cautious lending conditions ahead of November's general election
New Zealand's mortgage market remains subdued heading into the November general election, according to the latest mortgages.co.nz & Tony Alexander Mortgage Advisers Survey, though the 63 advisers surveyed report a clear split between two key borrower groups.
First-home buyer interest is gradually recovering after pulling back sharply following the Middle East conflict, while investor demand continues to lag with no sign of a turnaround.
A net 8% of advisers reported more first-home buyers seeking mortgage advice this month, back to levels last seen in early March but still well down on the net 33% recorded in February.
Tony Alexander (pictured) notes the data show "a movement of increased first-time buyers into the housing market but that the volume is still relatively light."
Investors, meanwhile, remain scarce, with a net 27% of advisers seeing fewer of them in the market — a reading consistent with the past three months. The report points to the approaching election, rising financing costs, and "reduced capital gain expectations" as likely factors keeping investors on the sidelines.
Lenders loosening, but buyers hesitant
Banks, however, appear increasingly willing to lend, with a net 30% of advisers saying lenders were more willing to advance funds this month, extending a trend seen over the past three months. Anecdotal feedback backs this up, with one adviser noting "the first-home buyer's criteria are getting looser day by day," while another reported "banks have very low application volumes and are therefore very willing to try to make deals fit."
On the investor side, standard properties are generally attracting 65–70% LVR approval where borrowers have stable income and sufficient equity, according to comments from advisers in the survey.
Even so, buyer urgency remains subdued. One adviser summed up the mood: "Everyone is standing back," warning that hesitant movers risk being left holding "a bunch of stale pre-approvals."
Two-year fixed still dominant, election a wildcard
Borrowers continue to favour fixing for two years, though preference for the cheaper one-year term has ticked up to 22% as rates have risen. That shift follows the RBNZ's 2 September decision to lift the official cash rate 25 basis points to 2.75%, with the central bank signalling further tightening may follow before year's end.
Refinancing activity, by contrast, has been flat, with advisers reporting no notable change since a sharp drop-off over summer.
With the November 7 election approaching, several advisers flagged growing caution among clients, describing a market where enquiry levels are inconsistent and many borrowers appear to be waiting for political and economic clarity before committing.
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