Westpac has once again seen a double-digit decline in investor lending over a 12-month period, while three third-party banks have also experienced a drop in home loan volumes for the segment.
According to APRA’s latest monthly banking statistics, the size of Westpac’s investor lending portfolio declined by 11.7 per cent over the 12 months to May, while its owner-occupier book posted 23.5 per cent growth during the period.
Back in October 2015, Westpac became the first of the four major lenders to increase its variable mortgage rates, announcing a 20-basis-point hike across both owner-occupied and investor home loans.
The remaining majors followed suit with similar hikes a week later.
When it announced its full-year profit results in November last year, Westpac noted that it had seen significant levels of customers switching from investor to owner-occupied loans in response to pricing and policy changes.
At the time, investment property loans accounted for 44.5 per cent of Westpac’s Australian mortgage portfolio.
APRA’s latest banking statistics for May show that investor loans now make up 38 per cent of the group’s total mortgage book.
The prudential regulator’s measures to cool investor lending have made a significant impact on the composition of Westpac’s mortgage book, and are clearly reshaping the competitive forces in the Australian home loan market. Westpac’s surge in owner-occupied lending over the 12 months to May (23.5 per cent) clearly reflects this.
Looking at the other major banks, ANZ recorded the second largest increase for owner-occupier lending over the 12-month period – up 16 per cent — while its investor portfolio shrank by 0.9 per cent.
CBA experienced 9.6 per cent growth in owner-occupier lending, and a 1.5 per cent rise in investor lending, while NAB was the only big four bank to grow its investor lending book (6.2 per cent) faster than its owner-occupier portfolio (4.9 per cent).
[Related: MyState doubles investor loan book value]