David Hargreaves looks at all-night mortgage loans as Kiwis lend to ‘productive’ parts of the economy


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A picture is worth a thousand words they say.

Is a graph a picture? I’ll let you discuss that with each other, except that graphs can also say a lot.


And the reserve bank’s statistics that people have produced a beauty (that is,) at the latter figures on lending to the sector published late last week. It tells us more than words can say.

But first a few words.

For the record, the figures show us that borrowing from private individuals / consumers continues to decline. The rapid rise of buy-now-pay later (BNPL) is probably largely the reason for this – but since figures for BNPL debt are difficult to pinpoint, it is difficult to quantify the impact precisely.

Agricultural credit continues to decline, with a year-on-year decline in this sector for every month since April last year. I think you can expect this to continue.

In fact, corporate lending increased slightly in April (emphasis on ‘little’), but the rate of the annual decline was about -5%, the highest percentage of the annual decline for about 10 and a half years since the aftermath of the global financial crisis.

So it’s all down, down, down for loan, apart from well, would you believe it … housing.

It goes up a bit.

Like the previously released monthly mortgage figures It turned out that in March, Kiwis borrowed a whopping $ 10.5 billion on new mortgages (yes, it was a record for a month).

Perhaps unsurprisingly, the total stock of home loans increased by $ 3.7 billion (1.2%) in March. Both the numeric amount and the percentage gain were records, bringing the country’s mortgage stack to $ 308.7 billion.

The annual growth of the housing stock rose to 9.7%, the highest level in just under 13 years.

So here’s what this all looks like.

Ladies and gentlemen, I present to you The New Zealand Economy:

As you can see, all the lines there have gone underground, apart from our old friends house. Some might say that we put all our eggs in one basket. (Again).

But I think that as long as we can trade houses among ourselves at increasingly higher prices, we don’t need a ‘real’ economy. After all, what can go wrong?

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