Home Loans take the lead during lending increase

Lending finance +6.9 per cent in 2015

Lending finance

On a seasonally adjusted basis total Lending Finance dipped back to $72 billion in December from a 7.5 year high of $75 billion in November.

The trend result (just) sits at a new high of $73.8 billion.


The below chart shows that the main driver of the +6.9 per cent trend increase in lending over the past year has been a hugely strong uplift in home loans, which increased very substantially by +21.4 per cent over the year.

The trend in commercial lending on the other hand now appears to be softening, although total business lending increased by +9.6 per cent over the year, and has generally been tracking at somewhere pretty close to the levels seen at the peak of the mining boom.


Property market loans


The lending finance data also contains figures for property investor loans by state, which are not seasonally adjusted and therefore are presented below on a rolling annual basis.

Investor lending increased in New South Wales and Victoria in December, but on a rolling annual basis totals are now pulling back from record highs following APRA’s intervention of last year.

Property investment loans have already dipped well down from their peak in Western Australia, although the state recorded its best result in five months in December.


It is worth noting that in the most populous states most of the slowdown in investor lending has been quickly replaced by owner-occupier loans.

The below chart shows the raw original data for New South Wales where total commitments of $13.9 billion were recorded in December, which is +10 per cent higher than one year previously.



Moreover, if you look at loans actually advanced to NSW owner-occupier borrowers by month, lending has gone almost parabolic, which perhaps to some extent accounts for why the Sydney auction market has got off to a more sprightly start in 2016 than many had expected.

Indeed, at $23.8 billion of home loans advanced nationally for a rise of +24.6 per cent, December was the biggest ever month for home lending.



It is not quite such an upbeat state of affairs across all of Australia’s housing markets, though, and especially not in the Top End.

Year-on-year investor lending continues to nosedive in the Northern Territory, with the pace of decline in investor lending having accelerated over the past 16 months.

By the time the frightening gradient of the trendline in this chart bottoms out we can expect to see home prices in Darwin and other Northern Territory cities having corrected by a substantial percentage.


Overall, it was a weaker month for commercial finance, but perhaps this was overdue given that total business lending overall was up by +9.6 per cent in the calendar year.

Property market lending continues to rebalance away from investors and towards owner-occupiers, with low interest rates sending total home lending to new highs by the month.


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is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. Using a long term approach to building businesses, investing in equities, & owning a portfolio he achieved financial independence at the age of 33. Visit his blog

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