New-build lending hits a four year high

Lending for new-build homes has hit a four year high and has grown by 9% in the year to September 2018 according to new figures from ANZ, New Zealand’s largest mortgage provider.

While existing house purchases still make up the majority of lending figures, new-build growth has now overtaken existing home growth, with existing home loans growing by a total of 8% over the same period of time. Existing home loans still account for 64% of ANZ’s loan book, and remain the most popular option among homebuyers.

According to ANZ managing director for retail and business banking Antonia Watson, the environment shows positive trends towards housebuilding, and is a promising step towards increasing a desperately needed supply of housing – an issue which has been a government priority since it took office.

“We are in the midst of one of the three biggest booms in new building consents that New Zealand has ever seen,” Watson stated. “As a result new builds are a higher share of both the total stock of properties as well as properties on the market.

“Demand for housing, particularly in Auckland, remains strong and the shortfall in houses being built has meant it’s been a stretch for some buyers to get their foot on the property ladder in the past,” she explained. “At a time when more houses are desperately needed, it’s great to see increasing numbers of customers embark on new builds.”

Watson says other facts influencing new build growth are continuing low interest rates, the easing of construction cost inflation in Auckland, easing land prices and new models for infrastructure funding. She also says that more and more homeowners are choosing to invest in their existing properties through renovation, rather than simply moving from one home to another to capitalise on value.