Call 1300 805 221or

APRA on ‘high alert’ as investor lending soars

April 2, 2017

APRA on ‘high alert’ as investor lending soars

Housing finance commitments posted further growth in January, driven by the investor segment.

While the value of owner-occupied housing finance fell by 0.2 per cent over the month, investor lending was up 4.2 per cent to be 27.5 per cent higher over the year.

ANZ Research noted that the recent acceleration in investor activity “is sure to keep both the RBA and APRA on high alert, as market sentiment shows no signs of easing”.

The total value of housing finance commitments rose a solid 1.5 per cent in January.

“This was entirely driven by the investor segment, which came roaring back to the market after a slight decline the month prior,” ANZ Research said.

“Investor growth of 4.2 per cent m/m saw annual growth push higher to 27.5 per cent. This is the fastest rate of growth since August 2014 – before APRA’s macroprudential regulation took effect.”

The continued strength of the investor market remains an important issue for both the RBA and APRA. While no further macroprudential measures have been announced, AMP Capital chief economist Shane Oliver continues to believe more curbs are on the way.

“While I may be jumping at shadows, the latest post-meeting Statement from the RBA implied a bit of unease regarding lending to residential property investors and lending standards, probably on the back of the continuing surge in Sydney and Melbourne home prices,” Mr Oliver said.

“Most notably in the February Statement it said that “supervisory measures have strengthened lending standards” whereas it’s now saying that “supervisory measures have contributed to some strengthening of lending standards” which suggests the RBA thinks a further tightening in lending standards in relation to lending for housing may be required,” he said.

“More macroprudential measures to slow property investment may be on the way and this could take the form of lowering the threshold for growth in banks’ total lending to investors to say 7 per cent year-on-year from 10 per cent currently.”

(Scource: The Adviser)

Tags: , , , , , , , , ,


Better Choice Mortgage Services is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within this website. While the information contained within this website is periodically updated, no guarantee is given that the information provided in this website is correct, complete, and up-to-date. Although the Better Choice Mortgage Services website may include links providing direct access to other internet resources, including websites, Better Choice Mortgage Services is not responsible for the accuracy or content of information contained in these websites. Links from Better Choice Mortgage Services to third-party sites do not constitute an endorsement by Better Choice Mortgage Services of the parties or their products and services. The appearance on the website of advertisements and product or service information does not constitute an endorsement by Better Choice Mortgage Services, and Better Choice Mortgage Services has not investigated the claims made by any advertiser. Product information is based solely on material received from suppliers. Advanced Finance (Pty) Ltd t/a Better Choice Mortgage Services are not financial planners or accountants and we would encourage our clients to seek professional advice before acting on any a financial or taxation information in this news post.
Get Connected