APRA’s crackdown on risky lending practices has made a further impact on the market, according to the ABS housing finance data released today.
The ABS data shows there was a 1.4 per cent drop in investor lending in May and a 4.7 per cent drop over the last quarter, according to the seasonally adjusted figures.
Lending to owner-occupiers increased by 2.9 per cent, resulting in an overall increase in housing finance commitments of 1.3 per cent.
APRA intervention having an impact
RateCity.com.au money editor Sally Tindall said that while today’s result was further evidence the APRA intervention was having an impact, the figures might disappoint the regulator.
“Today’s investor lending figures are moving in the right direction, but APRA will want to see far bigger drops than this.
“Over the last quarter we’ve seen two rounds of rate hikes for investors paying interest-only, so further drops in investor lending are extremely likely in the months to come.
“Interestingly, the surge in owner-occupier lending has more than made up for the drop in investor lending, defying increasing speculation the housing market is waning.
“The government regulator will be pleased with this surge as it shows that the ‘right’ type of people are taking out home loans.
“Today’s results are likely to be replicated in the coming months when the most recent bank rate changes are factored in.
“It just goes to show there is no shortage of owner-occupiers waiting in the wings when investors get cold feet.
“Owner-occupiers with principal-and-interest loans are now paying an average of 80 basis points less than investors with interest-only loans, so it’s no wonder they are stepping up to the plate,” she said.
Average variable rates
|Owner-occupier, principal & interest||4.29%|
|Investor, principal & interest||4.72%|