Australian home loan lending scales new heights in July

Photo by ChinaFotoPress/ChinaFotoPress via Getty Images

The number of home loans extended to Australian owner-occupiers rose modestly in July with the ABS reporting an increase of 0.3% to 53,095.

The figure, below the 0.8% increase expected, followed an upwardly revised 4.8% surge in June.

Loans extended for housing construction fell 0.9% to 5,513 while those to purchase new housing increased 2.0% to 2,765.

In what may disappoint those who were looking for a more marked response to recent macroprudential measures introduced by APRA, lending to housing investors resumed its uplift, rising 0.5% to $13.587 billion following a 0.7% decline in June.

Over the past year it has grown by 16.5%, from 22.9% seen in June. Despite the slowdown, in cumulative terms, lending to housing investors grew by $155.5 billion over the past year, the largest annual increase on record.

For a historic comparison, the annual increase in percentage terms is shown in the chart below.

And, to put a dollar figure behind the percentage increase, here’s the rolling annual total going back to July 1995.

While lending to housing investors grew modestly, those for owner occupiers grew by 2.2%, rising to $19.226 billion. Excluding refinancing, lending jumped by $12.983 billion, the largest increase on record.

Combined, total lending for housing grew by $32.812 billion in July, or 1.48% – also the largest increase on record.

While there have been measures put in place that over time will slow the growth in lending to housing investors, it is clear that demand for housing credit remains extremely strong at present.

Clearly not everyone shares the view that Australia’s property market is in a bubble.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.