Investor home loan lending in Australia continues to rise

Burrard-Lucas / Barcroft Media / Getty Images

Whether measured in dollar value or in the number of loans written, home loan lending in Australia fell modestly in August.

Except for housing investors, that it.

According to figures released by the Australian Bureau of statistics earlier today, the value of owner-occupier lending fell by 1.6% to $19.497 billion in August in seasonally adjusted terms.

Excluding refinancing, the value of lending to this category fell to $13.073 billion. Though fractionally above the $13.041 billion level of July, it remains well below the most recent peak of $14.366 billion seen in September 2015.

Refinancing of owner-occupier loans came in at $6.424 billion, down from $6.777 billion in July and the lowest total seen in a year.

The decline in the dollar terms was mirrored by the total number of owner-occupier loans written.

According to the ABS, dwelling commitments to owner-occupiers fell by 3% to 53,109.

Breaking that figure down further, most of the weakness was concentrated in loans to buy an existing home which fell by 3.9% to 44,824. Excluding refinancing, loans to buy an existing property fell by a smaller 1.3% to 34,349. It was the lowest number since May 2015.

Loans to purchase a new house dipped 0.4% to 2,614 while loans for the construction of a new home rose by 3.7% to 5,671.

In original terms, the percentage of owner-occupier loans to first home buyers rose to 13.4%, fractionally above the more than decade-low of 13.1% hit in November last year.

While the numbers for owner-occupier lending were soft, the value of investor lending rose for a fourth consecutive month, and sixth month in the past seven.

After seasonal adjustments, the value of lending to investors rose by 0.1% to $11.915 billion, trimming the year-on-year decline in lending to this category to just 5%.

In April this year, the percentage decline had been as much as 26%.

On that score, investor lending is making a comeback.

The acceleration in investor credit mirrors the findings of a survey conducted by UBS which found the proportion of properties being purchased for investment purposes increased in 2016 compared to the levels of a year earlier.

The ABS does not release data on the number of loans issued to investors as part of this release.

Adding the value of investor and owner-occupier lending together, total housing finance stood at $31.413 billion in August, the lowest monthly total since April.

In August 2015, one year ago, this figure stood at $33.045 billion.

In original terms, the value of outstanding housing loans in Australia rose to $1.524 trillion in August. The value of loans to owner-occupiers is currently $987.054 billion while those to investors now stands at $536.729 billion.

According to the ABS’ residential property price index for the June quarter, the value of Australia’s housing stock currently stands at $6.045 trillion.

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