Sales dive to new depths – lending at low DTIs

This comes at the same time Reserve Bank figures show borrowers taking out mortgages in excess of the central bank’s proposed debt-to-income (DTI) levels are well below the six times income for owner-occupiers and seven times income for investors.

The RBNZ data covering the final quarter of last year show borrowers well within the proposed restrictions expected to be imposed from the middle of this year.

In December, 29.6% of new mortgages had a DTI of five – the lowest since data collection began in 2017. For first home buyers 24% of new mortgages had a DTI of five – also the lowest since data collection began. This share has fallen from 35.3% in December 2022. New mortgages to investors with a DTI of five reached a low of 39.4% in October but rose to 42.4% in December.

Borrowers taking out mortgages with a DTI of seven hit 6.1% in December, up from a record low of 5.2% in September. The highest share was in January 2021, when 26.5% of new mortgages were with a DTI of seven. The lowest share of new investor lending with a DTI of seven was during October at 8.6%.