Australian home loan lending topped expectations in November, bucking weakness seen in other housing related data.
According to the ABS, loans to owner-occupiers rose by 1.8% to 56,798, beating forecasts for a decline of 0.5%.
Loans for existing dwellings increased by 2.0% to 48,043, completely mitigating a 3.5% decline in loans for new dwellings which slid by 3.5% to 2,829. Loans for housing construction rose 2.7% to 5,926.
In dollar terms, the total value of home loans extended increased by 1.8% to $33.302 billion, leaving the annual growth rate at 11.7%.
Loans to owner occupiers grew by 2.4% to $21.753 billion, the highest level on record. From a year earlier lending increased by 25.8%.
Excluding refinancing, the value of loans increased by 1.7% to $14.630 billion, also a record high. Over the year it rose by 22.8%.
Completing a hat-trick of records, the value of refinancing also rose to the highest level on record, increasing 3.9% to $7.123 billion.
As opposed to the prior six months where it had fallen, lending to housing investors rose by 0.7% to $11.549 billion. From a year earlier the dollar value slid by $968.1 million, or 7.7%, reflecting tighter restrictions on lending to housing investors implemented by APRA.
The chart below reveals the recent trend in lending to both owner occupiers and housing investors.
It’s clear that the sharp deceleration in lending to investors has been completely offset by a surge in lending to owner occupiers, adding to speculation that lenders are finding ways to reclassify loans once deemed to investors as those for owner occupiers.
And here’s the total value of home loans outstanding at Australian lenders. In original terms, it rose to $1.449 trillion in November, also a record high.
Over the past year loans outstanding to owner occupiers increased by $90.651 billion to $922.242 billion, overshadowing a smaller $16.249 billion increase in loans to investors that rose to $526.894 billion.
While clear that measures introduced by APRA have succeeded in stemming growth in lending to housing investors, there’s little sign of a slowdown elsewhere; quite the contrary.
Given recent softening in house price expectations and overall sentiment towards the housing market, it will be interesting to see whether this acceleration in lending – particularly to owner occupiers – will be sustained in the months ahead.