According to new monthly figures from the Australian Prudential Regulation Authority (APRA), in November 2016 there was just over $977 billion of owner-occupied loans held on Australian books (an increase of 0.58 per cent), while investment housing loans rose by 0.58 per cent to $536 billion.
Looking at the big four banks, the Commonwealth Bank of Australia (CBA) held the highest value loans, with its books showing $403.4 billion in mortgages. More than half of this ($267 billion) comprised owner-occupied loans (up 0.44 per cent on the previous month).
Westpac came in second place with $375.4 billion in loans, of which $141.1 billion were investment loans, the most of any of the big four banks. Indeed, the banking group saw investment loans rise by 0.71 per cent on October figures.
Meanwhile, ANZ’s loan book was valued at just under $157 billion for owner-occupied and around $81 billion for investment loans (the least of the big four banks). The latter was up on last month’s figures, when ANZ’s investor loan book was $200 million smaller.
NAB’s loan book was the smallest of the big four, with the bank holding $135,990 billion in owner-occupied loans at the end of November and just over $99.5 billion in investor loans. The bank's investment portfolio dropped by nearly $400 million between October and November 2016.
Speaking of the figures Martin North from Digital Finance Analytics commented: “The total loan portfolio rose 0.65 per cent in the month to a new high of $1.51 trillion. Within that, owner occupied lending rose 0.69 per cent, by $6.7 billion to $977 billion, and investment lending rose 0.58 per cent, by $3.1 billion to $536 billion; accounting for 35.44 per cent of all loans. We see investment lending still accelerating (as expected, based on our household surveys).”
Mr North added: “The 12-month system investment portfolio movement is 3.5 per cent, but has accelerated in recent months. Testing against the 10 per cent APRA speed limit, we see that most lenders are well below this threshold.
“We think the limit should be dropped, as investment loan momentum is too strong, and well above inflation and wage growth.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.