MORTGAGE advances declined from 4,8% in September year-on-year to 3,6% in October, continuing their “long multi-year declining trend and edging steadily closer to negative growth territory,” First National Bank Home Loans property strategist John Loos said yesterday.

He said that while residential mortgage advances were “the lion’s share of the total, and thus the major influence”, commercial mortgage advances growth was “literally dropping like a stone”.

Residential advances for September showed 4,8% y/y growth, down from 5,4% previously, “as this category of loans starts to reflect the dramatic drop in new lending from around mid-2007”.

Commercial property advances recorded 8,5% growth for the same month. “While still more respectable than the residential mortgage growth rate, the commercial growth rate is declining at a far greater speed, having been double its most recent rate at around 17% as recently as June.”

The smaller farming sector mortgage segment showed 14,4% y/y growth for September, “but it, too, has slowed significantly, with its previous month’s growth being 17,2%”.

The farming sector has seen its gross domestic product slip into negative growth this year after a bumper production year last year, while food prices have also slipped significantly after the end of the commodity price spike in the middle of last year.