RBNZ figures show commitments down 13% annually as investor share slides
New mortgage commitments in New Zealand fell to $7.9 billion in July, the lowest monthly total since February, according to the latest Reserve Bank (RBNZ) figures, with investors pulling back further even as first-home buyers held their ground, interest.co.nz reported.
Borrowing volumes slide across the board
July's total marked a 7% fall, or $592 million, from June's $8.5 billion, and a 13.1% drop, or almost $1.2 billion, compared with July 2025.
The number of borrowers taking out new mortgage commitments also fell, down 4.9% month-on-month to 21,268, and down 7.2% annually from 22,930 a year earlier.
The average new loan value across all purpose types dropped to $369,256 in July, down 2.2% from June and 6.3% lower than a year ago.
Investors pull back, first-home buyers gain ground
The investor share of new commitments fell to 18.9% in July, down from 19.5% in June and 2.3 percentage points lower than a year earlier, the steepest decline of any borrower category.
Other owner-occupiers — borrowers who aren't first-home buyers but are buying or own a home to live in — held the largest share at 59.6%, though this was down slightly from June's 60.4%.
First-home buyers were the only group to gain ground, with their share rising to 20.1% in July from 19% in June, an annual increase of 0.7 percentage points.
A related RBNZ dataset on loan-to-valuation ratios adds further detail to this picture: commitments above 80% LVR held relatively steady at $1,261 million in July, little changed from June, though Auckland owner-occupier lending fell more sharply on the month than the rest of the country, dropping to $1,868 million from $2,165 million.
The RBNZ flagged rising mortgage rates as a headwind for the housing market more broadly, having noted in its May Monetary Policy Statement that the shift would likely dampen house price growth.
"If mortgage rates increase over time, consistent with current market pricing for wholesale rates, then mortgage holders will likely be refixing onto higher rates on average by March 2027," the RBNZ said, adding that "the average interest rate on outstanding mortgages declined to 4.9% in March but is expected to increase to 5.3% over the next 12 months."
Bank switching activity also cools
Refinancing activity slowed alongside the broader pullback, with new commitments for changing loan providers down 1.4% by value to $640,818 in July, and down 21.1% annually by number.
Property purchase commitments fell 12.8% annually by number, even as their share of total commitment value rose to 57.4%, up from 55.9% in June.
Loan-to-value ratio settings remained unchanged this month, with RBNZ assistant governor for financial stability Angus McGregor (pictured) describing housing risks as "currently contained," pointing to broadly flat national house prices and modest mortgage lending growth in recent years.
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