Australian housing finance eases across investors and owner-occupiers

 I keep track of housing finance figures because it gives me an indication of what’s ahead for our property markets.

That’s because home buyers and property investors get their finance approved a number of months before they eventually purchase a property

ANZ Bank reported that housing finance fell 4.6% m/m in May, following two consecutive months of solid growth in March and April.

Finance was lower in the month across both the investor and owner-occupier segments.


The Bank says that while this result may pique concerns about the dampening impact of macro prudential policy on investor sales, the data equally points to the significance of owner-occupier demand in the face of softer investor lending.

Despite continued buoyant housing market activity, housing finance posted a soft result in May with negative monthly growth posted across both the investor and owner-occupier segments.

This data coincides with reports of banks tightening housing investor lending conditions in May (including removing investor interest rate discounts).

While this will have had some impact on investor lending in the month, we think the full effect of these changes are likely to take some months to impact on investor housing finance as highlighted in last week’s RBA Board meeting minutes.

Looking ahead, we expect actions by housing finance lenders and APRA to tighten investor lending conditions will likely maintain trend investor finance growth at around 15-25% in annual terms through the second half of 2015.

This is in the range that would maintain investor credit growth within APRA’s annual growth target of 10%.

Nonetheless, the appetite for housing from investors is likely to remain strong, driven by the combined impact of low interest rates, solid house price gains and the recent volatility in financial asset returns.

New owner-occupier mortgage lending (excluding refinancing) continued to disappoint in May, with finance for both first home buyers and upgraders decreasing in the month.

In fact, excluding refinance activity, the number of new owner-occupier finance commitments has been falling in trend terms since February 2014.





Want more of this type of information?


Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

'Australian housing finance eases across investors and owner-occupiers' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.



Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...