Mortgage advisers report quiet demand but easing bank caution in July
Tony Alexander's July survey finds mortgage demand still subdued, with investors lagging first-home buyers and banks easing up on lending.
Mortgage advisers are reporting persistently quiet demand for finance, according to the latest mortgages.co.nz and Tony Alexander Mortgage Advisers Survey, which drew 58 responses this month.
Overall financing demand remains low, reflecting subdued conditions in the residential real estate market, though there are early signs of stabilisation.
The subdued mood tracks with official REINZ data: national sales fell 11.0% in June compared with May and were down 2.9% on June last year to 5,996, while the national median price held broadly steady at $770,000, up 0.7% year-on-year.
First-home buyer enquiries, which fell sharply in the two months following the US attacks on Iran, have recovered slightly but remain below pre-conflict levels, with a net 12% of advisers still reporting fewer first home buyers compared with 14% last month.
Investors still sitting on the sidelines
The investor segment continues to lag well behind first home buyers, with a net 29% of advisers reporting fewer investor enquiries this month — unchanged from last month, though an improvement on the net 48% negative readings seen in April and May.
According to the report, weakness in this part of the market "looks likely to continue for some time" given ongoing monetary tightening and unresolved tensions in Iran.
One adviser noted a distinction in the type of investor still active.
"Haven't seen many investors but the ones who are looking have got good equity and a long-term plan rather than speculation to sell for capital gains," they said.
Banks easing up, borrowers favouring two-year fixed
Lender caution, which spiked immediately after the Middle East conflict began, has eased over the past two months. A net 36% of advisers now say banks are more willing to advance funds, up from 29% a month ago and just 2% two months earlier.
The two-year fixed term remains the overwhelming favourite among borrowers, chosen by 72% of respondents, though preference for three-year fixed terms has ticked up to 14%, from 6% last month.
Refinancing enquiries, meanwhile, remain softer than the level seen from mid-2023 to the end of 2025, with a net 14% of advisers reporting fewer refinancing requests this month.
One adviser summed up the mood: "Irrespective of what happens with the OCR, there are fewer transactions happening... Lot of preapprovals being done but not converting them into settlements," they said.
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