Yar – although one thing to keep in mind is that the value rises with the price of houses, so if we want to discuss turnover we need to look at the volume data, which is not as strong.

However, this doesn’t invalidate the point, it is true that new mortgage lending has risen a lot. But at the same time, the doesn’t tell us how much NET mortgage lending has risen – it just tells us that people have been transferring their mortgages, and buying more houses. In order to see if we are seeing a strong lift in household investment in housing we need to look at net mortgage lending – as otherwise people may be paying off mortgages.

And that data is sitting here:

http://www.rbnz.govt.nz/statistics/monfin/c6/data.html

Net mortgage borrowing in September was up 2.5% from a year earlier. Still a very weak rate of growth.

So we know that sales numbers, outside of Auckand, are very low from the REINZ data. We know that building activity is historically very very low from Stats NZ. And we know that, even with interest rates debt growth by households is still very low – as they are not building houses, or using the wealth from housing to buy other consumer goods.

This all tells us that we are facing a very different beast to the previous housing boom starting in the early 2000s – when house sales figures were very high, building activity was relatively high, and net mortgage borrowing was rising in double digit rates.

This isn’t to say something funky might be going on in Auckland in reality – but on top of all this we know there is a massive shortage of property, and we know that credit conditions have been easing in recent months. From here, the lift in prices will hopefully lead to a sharp lift in building in the region – and if price growth is maintained after that, then we may be concerned – and that is the point when the RBNZ may consider things such as LVR’s.

If you run the “value of approvals” data back to the start of the last housing boom we are surely at the start of another bubble.

Indeed, if people are moving here and paying high prices they are transfering a bunch of wealth to people who owned the land previously – I wonder what they’re doing with it?

Not that i have a problem with immigration rates, i’d just prefer to have property to benefit from it.