Investor loans now a majority

New data from the prudential regulator has revealed that investor loans now make up the bulk of mortgages on combined bank loan books.

Released yesterday, APRA’s Quarterly Authorised Deposit-taking Institution Property Exposures found that investor loans for all banks were $425.4 billion at 30 September this year, or 51.5 per cent of total residential lending.

This compares to the quarter ended 30 September 2013, where investor loans accounted for 49.6 per cent of all residential mortgages.

Meanwhile, Australia’s non-major lenders have seen a significant increase in their share of residential loans over the 12 months to 30 September.

APRA data reveals that major banks held $1,014.3 billion of residential term loans, an increase of $19.8 billion (2.0 per cent) on 30 June 2014 and $81.0 billion (8.7 per cent) on 30 September 2013.

However, non-major lenders saw a far greater increase by comparison, with ‘other domestic banks’ holding $135.3 billion, an increase of 3.5 per cent on 30 June 2014 and 15.0 per cent on 30 September 2013.

Foreign subsidiary banks held $54.9 billion, an increase of 1.2 per cent on 30 June 2014 and 5.8 per cent on 30 September 2013, while building societies held $16.6 billion, a decrease of 2.8 per cent on 30 June 2014 but an increase of 1.1 per cent on 30 September 2013.

Credit unions held $29.2 billion, an increase of 1.8 per cent on 30 June 2014 and 5.8 per cent on 30 September 2013.

APRA noted that the higher growth of other domestic banks and lower growth of building societies and credit unions is in part due to the conversion of eight credit unions and one building society to banks.

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