Investors drive home loan growth
Investors are continuing to be the main force in home loan growth, in spite of moves to limit lending in the sector.
Lending to investors has driven growth in housing finance, according to new figures from the Australian Bureau of Statistics (ABS).
February 2016 figures for home loan finance show the value of investor lending rose a seasonally adjusted 4.1% for the month. Owner occupied lending was up as well, albeit by a more modest 1.7%. The total value of home lending rose 2.6% for the month.
The number of home loans for owner occupiers was up 1.5% for February. The increase was driven by the purchase of established dwellings, up 3%. Construction loans, meanwhile, fell by 1.9%, while loans for the purchase of new dwellings nosedived by 15.4%.
The fall in construction loans and loans for the purchase of new dwellings came on the heels of significant declines in building approvals for February. Total dwelling approvals were down 9%, while approvals for private sector houses fell 5.1%.
Source: Australian Bureau of Statistics (ABS)
Concerns over the level of investment in home loans in Australia and the risks associated with over-investment saw the Australian Prudential Regulation Authority (APRA) tighten the rules around approvals for investor loans. Banks are now required to ensure that no more than 10% of their loan book is assigned to investor loans.