Lending momentum holds as advisers navigate first OCR hike in three years
New home loan accounts have started the 2027 financial year on solid footing, rising 10% year-on-year in April and a further 2% in May, according to Experian’s July Business Pulse Monthly report.
Funding holds steady as rate settings shift
Total mortgage funding over the three months to May was 6.8% higher than the same period last year, boosted by a strong March result. High debt-to-income lending of 6x or more has eased slightly over the past two months, sitting at 18%, though the report notes this "remains significantly higher than pre-2025 levels."
Average owner-occupied loan sizes came in at $357,041 in May, down 1.4% on the same month last year, while loan-to-valuation ratio (LVR) fundings above 80% have stayed elevated since the start of the year.
The strong start comes ahead of a rate shift: the Reserve Bank lifted the official cash rate by 25 basis points to 2.5% in July, its first increase in more than three years, following inflation climbing to 4.1% for the June quarter. ASB has warned mortgage rate lows are now behind borrowers, with floating rates seen as most exposed to further increases.
Sentiment improving, but headwinds remain
Consumer and business confidence both rebounded in June. Consumer confidence lifted to 91.3, up 4.8 points from May, while business confidence jumped 27 points to 37, per the ANZ-Roy Morgan survey. Both measures remain below the highs recorded in January, however.
House sales fell to 5,996 in June, an 8% drop from May, though sales were still 2% higher than the same month last year. The report attributes the monthly decline to seasonal patterns rather than a structural slowdown.
Company insolvencies, by contrast, remain elevated — up 43% in June compared with the same month last year — though the report cautions insolvencies are "typically a lagging indicator of economic conditions" and may reflect pressures accumulated over the past one to two years rather than current trading conditions.
