Most of the growth was attributed to owner occupiers, surging 0.5 percentage points to 8.4% compared to the 12-month ended figure last month, while investment lending increased 0.3 percentage points to 2.2%.

The Annual housing credit growth figure is the highest since February 2018, while the owner occupier figure is the highest since October 2016.

By contrast, wages rose just 1.7% over the year, offset by trimmed mean inflation of 1.6%. 

Westpac economist Andrew Hanlan pointed to another heady statistic.

"Housing credit grew by 8.1% annualised over the three months to August. This includes a 0.62% increase in the month of August, which is an annualised pace of 7.7%," Mr Hanlan said.

"That is the fastest three month pace since April 2010.

"The sector was in a brisk upswing ahead of the latest lockdowns, responding to record low rates, the HomeBuilder program and a switch in demand as folk looked for more space at home.

"The RBA is closely monitoring developments in the housing market, with credit growth currently running ahead of that of household incomes."

ANZ economist Adelaide Timbrell echoed similar.

"The strength [is] still coming from owner-occupier borrowing. Even at these levels, housing credit will likely continue to outstrip income growth, which the RBA has consistently said is a concern for them," Ms Timbrell said.

The RBA's data comes after the Council of Financial Regulators (CFR) indicated yesterday it is reviewing current framework around lending conditions after strong property price growth through the year.

One of the policies tabled includes clamping down on lending to borrowers with debt to income ratios above six, which has surged this year.

New Zealand already has loan-to-value ratio restrictions - most owner occupiers need a 20% deposit, and most investors need a 40% deposit, or equity.

From Friday, Kiwi property investors will also be able to claim only 75% of their mortgage interest against their rental income, while certain 'bright line test' capital gains tax advantages will also be tweaked.



Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Photo by Steve Buissinne on Pixabay

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy