Australian home loans hit record high as investors make comeback
The value of Australian home loans hit an all-time high in August, due to an increase in loans to investors.
According to the Australian Bureau of Statistics (ABS), housing finance jumped 2.1% to $ 33.9 billion in seasonally adjusted terms, beating the previous record of $ 33.75 billion set in January from This year.
Compared with a year earlier, the value of total housing finance was up 8%, up from 3.8% in July.
In what will no doubt raise eyebrows at the Reserve Bank of Australia (RBA) and Australian banking regulator, APRA, the value of investors’ real estate finance jumped 4.3% to $ 12.633 billion in the month.
This is the highest monthly total since March of this year and the highest in percentage terms since November 2016.
It also left investor loans up 6.5% from a year earlier, a sharp rebound from sluggish growth in the 12-month period through June.
With just one month’s numbers up, the rebound casts doubt that attempts to slow investor activity through tighter macroprudential measures are working.
“APRA data for the second quarter showed that banks were making progress in reducing interest-only loans, although measures to date do not appear sufficient to slow credit growth in line with income growth, in accordance with the wishes of regulators, “said Henry St John, economist at JP Morgan. .
“The RBA may have more to say about this in Tomorrow’s Financial Stability Review,” he said, adding that “the growth trend in investor lending will be closely watched by regulators.”
In its October monetary policy statement, the RBA noted that “growth in mortgage debt has been outpacing slow growth in household income for some time.”
Relative to the boom in investor financing, homeowner loans increased just under 0.9% to $ 21.265 billion during the same period.
In this figure, non-refinancing loans stood at $ 15.225 billion, up slightly from the level recorded in July. In dollar terms, this was a record high and a massive 17.6% increase from 12 months earlier
Explaining the increase in loans to this category during the month of August, refinancing of homeowner facilities rose 3.3% to $ 6.04 billion. Despite this increase, the value of refinancing still fell by 8.1% compared to the previous year.
With the sharp increase reported in August, it left total outstanding loans issued by Australian Authorized Depository Institutions (ADIs) at $ 1.611 trillion in unadjusted terms, the highest level on record.
Outstanding loans to homeowners currently stand at $ 1,053 billion, while those to investors stand at $ 557.8 billion. Both are records.
Reflecting the increase in the value of housing finance, the number of homeowner loan issuances also increased, increasing 1% to 57,161 on the month.
The ABS said loans for the purchase of existing homes rose 1.5% to 47,680 in seasonally adjusted terms, while those for the purchase of new homes also rose 1.5% to 3,135 .
After strong growth in recent months, new home construction loans fell 2.4% to 6,346.
Insinuating that attempts to improve affordability for first-time buyers in NSW and Victoria are working, ABS said loans to this cohort as a proportion of total homeowner loans have reached 17, 2%, the highest level since July 2013.
“The increase is mainly due to changes to first-time home buyers’ incentives in July by the governments of New South Wales and the state of Victoria,” ABS said, adding that ‘she “works with financial institutions to establish scale of first house increase”. buyer loan in recent months ”.
“These numbers are subject to revision and users should exercise caution when interpreting recent ABS statistics on first-time homebuyers,” he said.
The ABS does not publish information on the number of loans granted to investors as part of the housing finance report.