Banks steady as investor demand fuels housing rebound
New Reserve Bank (RBNZ) data shows mortgage growth has accelerated sharply this year, with total housing lending rising at nearly double the rate of two years ago, interest.co.nz reported.
Mortgage lending hits strongest level since 2021
While house prices have remained flat amid strong supply, underlying demand is clearly strengthening.
In the first nine months of 2025, total outstanding mortgage lending rose $15.2 billion, bringing total mortgage stock to $379.3 billion at the end of September.
That compares with $9.3 billion over the same period in 2024 and $7.8 billion in 2023 — nearly double the pace of two years ago.
During the post-pandemic boom in 2021, mortgage lending surged by a record $30 billion, or more than $2.5 billion a month, before easing over the next three years.
Investors drive renewed housing demand
Investor lending has staged a strong comeback after years of slower growth following the reintroduction of loan-to-value ratio (LVR) limits.
In 2023, just $340 million was added to investor mortgages. That figure climbed above $3 billion last year — and has already surged $5.2 billion in the first nine months of 2025.
As of September, investors held $98.7 billion in mortgage lending, with RBNZ noting the segment grew 0.7% in September alone. At the current pace, investor mortgage stock is expected to exceed $100 billion by year-end.
According to the RBNZ, investor lending strength reflects improving credit conditions and ongoing confidence in the property market as rates ease. The bank noted, however, that global trade tensions and policy uncertainty continue to weigh on the broader outlook.
Housing credit up 5.7% annually
Total housing lending increased $1.8 billion (0.5%) in September, slightly below August’s $2 billion rise, the RBNZ said. The annual growth rate lifted to 5.7%, its fastest since August 2022.
Owner-occupier lending rose $1.1 billion (0.4%), while investor lending grew $699 million (0.7%). Investor activity is now outpacing the broader market, expanding at an annual rate of 7.1% compared with the overall 5.7%.
RBNZ said banks remain resilient and well-positioned to support lending growth as global risks persist.
Market momentum points to busier 2026
Economists say the lending upswing reflects a shifting housing cycle — with demand improving even as prices stabilise. After a period of subdued credit growth, renewed investor activity, and easing rates are boosting mortgage volumes.
With stronger credit flows and RBNZ confident in the system’s resilience, mortgage advisers are likely to see rising loan applications and increased refinancing activity heading into 2026.
Read the interest.co.nz news here.
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