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Pope & Co. Note Investors Struggle as First Home Buyers Catch Up

Monday 25 March 2019, 7:25PM

By Beckie Wright

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Pope & Co. Mortgages is an award-winning mortgage broker and advice service, and recently noted that investor borrowing had slumped to its lowest level since January 2018 in the final month of last year, according to new figures from the Reserve Bank. First home buyers, meanwhile, continue their resurgence in the market, nearly surpassing investors.

 

The worry has to be that because the big four banks in New Zealand are Australian-owned their parents will force them to follow what happens in Australia. Nearly 60% of home loans in Australia are originated through advisers, and that market share continues to grow. With stats like that it's hard to argue that there is a customer issue.

 

Non-bank mortgage lending volumes jumped by more than $500 million last year, according to newly-released data, which underlines the growing prominence of alternative lenders. Data from the Reserve Bank shows New Zealand non-bank mortgage lending hit $2.70 billion in December, up from $2.17 billion in January, as borrowers seek alternative mortgage financing in the face of tightening from the big banks.

 

Non-bank mortgage volumes are at their highest levels since April 2012, when non-banks had $2.74 billion in mortgage volumes. Non-banks account for just a slither of total mortgages in New Zealand, however. Total mortgage lending hit $258.6 billion, with registered banks making up $255 billion of that number.

 

Nevertheless, the figures show non-banks have made a solid comeback since the aftermath of the financial crisis, when many pulled out of New Zealand or went out of business.

 

Non-banks are set to continue their charm offensive with mortgage advisers this year. Advisers are frustrated with tough servicing tests, restrictions on interest-only lending, and harsh treatment of investors with large portfolios, and have begun to view non-banks as a credible alternative.

 

To find out more about homestart grants NZ, Wellington property investment and  mortgage brokers please go to www.popeandco.nz .