2. The economy probably grew again in Q3 <\/p>\n
Speaking of the economy, there were further green shoots last week. In particular, the NZ Activity Index for September was up by 2.6% from the same month last year \u2013 the strongest figure since late 2022 and signalling perhaps a 0.5% lift in GDP in Q3 (when the figures are released on December 18). It\u2019s still early days, but that\u2019s encouraging news for an emerging recovery. <\/p>\n
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Cotality chief economist Kelvin Davidson: “A slowly recovering labour market is one reason why \u2013 for better or worse \u2013 modest house price growth is expected to resume in 2026.” Photo \/ Peter Meecham<\/p>\n
3. More FHBs at high LVRs and more investors at high DTIs <\/p>\n
Meanwhile, mortgage lending activity continued to grow in September, coming in at $8.2 billion \u2013 around $1.6b or 25% higher than the same month in 2024. Within that total, bank switching or “refi” remains high (albeit down from the peaks in June and July), a rising share of first home buyers are getting in at low deposit (<20%) or high LVR \u2013 51% of them in September; a new record high \u2013 and a greater share of investors are taking out loans at high debt to income ratios (>7). That figure was above 11% in September; still below the 20% cap, but the highest figure since January 2023 and definitely a trend to keep an eye on as 2026 approaches. <\/p>\n
4. Is employment finally turning up? <\/p>\n
Looking ahead, Stats NZ will publish September\u2019s filled jobs figures on Tuesday this week. These figures are prone to downward revisions, so we need to be careful. But even so, there were hints of an upturn in job creation in August, so hopefully we\u2019ll see more of that in September\u2019s data. A slowly recovering labour market is one reason why \u2013 for better or worse \u2013 modest house price growth is expected to resume in 2026. <\/p>\n
5. Looking for confidence to turn into activity <\/p>\n
We\u2019ll also get ANZ\u2019s business and consumer confidence measures for October later this week. After the downer provided by the weak Q2 GDP result announcement in September, the 0.5% OCR cut earlier this month may well have bolstered sentiment. However, it needs to stick for a few months yet, and also then turn into real activity and spending. <\/p>\n