LVR data for March 2013
The RBNZ announced LVR (loan to value) restrictions will start on 1 October 2013. It will limit high LVR (over 80%) to 10% of new lending. Matt has already written about this.
This post adds some data for context. The following figures are from the March 2013 quarter General Disclosure Statements, published on each bank’s website.
Note that the data are gross (that is net of repayments). I am sure each bank will vehemently deny these figures accurately reflect their position. But it is the best available.
| Mortgage holdings, as at Mar-13 | ||||
| <80% LVR | >80% LVR | Total | High LVR share | |
| ANZ | 40,454 | 11,661 | 52,115 | 22% |
| BNZ | 27,160 | 4,777 | 31,937 | 15% |
| WBC | 34,032 | 9,222 | 43,254 | 21% |
| ASB | 35,740 | 9,722 | 45,462 | 21% |
| Kiwi | 10,120 | 2,352 | 12,472 | 19% |
| Total | 147,506 | 37,734 | 185,240 | 20% |
Across the big four banks 15-22% of their books are in high LVR mortgages.
| Mortgage growth, Mar-13 year | ||||
| <80% LVR | >80% LVR | Total | High LVR share | |
| ANZ | 1,388 | 2,022 | 3,410 | 59% |
| BNZ | 844 | 462 | 1,306 | 35% |
| WBC | 1,525 | -1 | 1,524 | 0% |
| ASB | 560 | 2,369 | 2,929 | 81% |
| Kiwi | 726 | 1,797 | 2,523 | 71% |
| Total | 5,043 | 6,649 | 11,692 | 57% |
Of the growth in lending (net of repayments) some banks lent a lot more high LVR stuff than others. For example, Westpac slightly reduced its high LVR lending, while 81% of ASB growth was in high LVR.
If we hold the world constant, the $6.5b of high LVR lending growth over the past year will shrink to $0.6b.
Unless of course the economy is a real thing and not a static model. In which case lots of other things will adjust, like house prices, more lending at low LVR, mummy and daddy or other financial institutions topping up deposits, etc.
Holy fiat currency, Batman! We are going to lose ~$6b in new lending? That sounds like it might have a significant effect on consumer spending.
I doubt it – its likely to be much smaller. The banks hide all their true new lending figures. The RBNZ is implementing policy on data they wont publish….but this is the only data that is available. In the interest of transparency this is a good first approximation until the powers that be release the required data for a reasonable discussion.