APRA has been trying to take the wind out of the sales of the hot property investor market and it seems to be working.
ABS figures show building approvals have fallen and lending to property investors has also slowed down.
The number of homes approved for construction fell 6.9% in August, with an 11.4% decrease in the apartment sector.
Combining houses and apartments, an estimated 18,701 new homes were approved for construction in August – annualised, that would see Australia build more than 220,000 new dwellings a year.
That’s still way more than we need considering our slower population growth.
Lending growth accelerates even as investor loans slow
At the same time as building approvals remain around historically high levels, the latest RBA stats give an indication of how APRA’s crackdown is biting with show a continued slowdown in loans to property investors.
I’ve written before explaining how the financial regulator has tightened the screws on lending to property investors, imposing a 10% per annum growth limit on banks to that sector.
The ABC reports that speed limit is still being broken, with annual growth over the year to August of 10.7%.
However, this is down from 10.8 per cent the month before and a peak of 11.1 per cent in June, showing that the limit may be having some impact.
Lending to investors grew at 0.7 per cent last month, which was a touch up on July, but implies an annual growth rate of 8.4 per cent which would comply with the Australian Prudential Regulation Authority’s (APRA) limit.
Owner-occupiers appear to be taking up the slack left by investors, though, with loans to this segment growing 0.6 per cent in August, up from 0.5 per cent in July and 0.4 per cent for each of the three months before that.
The annual growth rate in this segment has picked up to 5.6 per cent, and that has helped overall housing credit to continue growing at 7.5 per cent – its fastest pace since September 2010.
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