Investor lending continues to fall

Posted on 08/09/2019 / Posted by admin / Category 苏州皮肤管理中心

The value of loans to housing investors has fallen for a second straight month, potentially giving the Reserve Bank room to cut rates without overheating the property market.


The value of total housing finance fell 1.0 per cent in February, with a 3.4 per cent fall in approvals for investment housing, Australian Bureau of Statistics figures show.

The number of home loans approved rose 1.2 per cent, well short of market expectations of a three per cent rise.

Investors have been driving housing demand in recent years, particularly in Sydney and Melbourne, pushing prices to record levels and pushing owner-occupiers and first home buyers out of the market.

Investor loan growth in NSW has more than doubled in the past three years, Reserve Bank figures show.

The Australian Prudential Regulation Authority responded in late 2014 by tightening rules for investor loans, with the aim of cooling the housing market.

St George senior economist Janu Chan said softer growth in lending to investors should begin to ease some of the RBA’s housing market concerns when it next considers interest rate movements.

“It is too early to conclude that recent measures by APRA to cool investor lending are working,” she said.

“Today’s data suggests that the RBA has some breathing room and should give greater comfort to lower official interest rates again.”

The RBA cut the cash rate in February and another reduction is expected in May, and Ms Chan expects this will continue to support a healthy housing sector.

“Home lending growth has eased for both owner-occupiers and investors, but the level of overall financing for housing remains buoyant,” she said.

JP Morgan economist Tom Kennedy said it appears growth in loans to investors has lost momentum, with the annual rate of growth at its slowest in since 2012.

“Today’s slip in investor loan growth broadly coincides with the announcement by APRA last December that oversight on banks’ lending activity would be increased,” he said.

“Specifically, APRA is now alert to any Australian deposit taking institutions with growth in their investor loan portfolio materially above 10 per cent per year.”

CommSec economist Savanth Sebastian expects there will be a shift in the sector later in the year, driven by home construction.

“Interest rates are at record lows and we haven’t been building enough homes to house our growing population,” he said.

“Activity levels in the new home building sector will continue to lift and should provide further support to an array of dependant sectors over the rest of 2015.

“It does seem to suggest that potential home investors are taking heed of the Reserve Bank’s warnings on over-leveraging in a low interest rate environment, in conjunction with the changes announced by APRA earlier this year.”

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