Now we know why APRA tightened the screws on Australian housing investment lending

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The RBA has just released its financial aggregates data for June and – you’ve guessed it – there’s was another significant increase in credit growth to housing investors.

From a month earlier, borrowing increased by $5.814 billion, the largest rise since June 2013, taking annual growth in credit to $52.504 billion, the largest expansion on record.

Unsurprisingly given the rapid growth seen in June, the level of outstanding credit extended to investors rose to $536.193 billion, also a record-high.

Over the past decade this figure jumped by 135%, or $307.765 billion. From 20 years ago, this extends to an amazing to 1,593%, or $504.52 billion.

Big growth.

Perhaps most importantly, particularly from a regulatory perspective, credit growth to housing investors increased by 10.7% from 12-months earlier, well above the 10% ceiling Australia’s banking regulator – APRA – warned could see additional measures put in place to cool lending to this segment.

Clearly those warnings were not heeded, and APRA, as we’ve seen, decided to act.

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