Investor lending bounces back in June

The latest housing finance figures from the Australian Bureau of Statistics show a resurgence in property investment loans over the month of June despite increased efforts to curb demand.

On a seasonally adjusted basis, the value of investor home loan commitments increased by 1.6 per cent over the month, while the number of owner-occupied home loans increased marginally by 0.3 per cent, undershooting market expectations of a 1.5 per cent gain.

“Note that the macro prudential tightening measures introduced in late March and associated increases in interest rates for investor and interest-only loans have likely given indirect support to owner-occupier loan activity,” Westpac senior economist Matthew Hassan said.

“That said, the value of investor loans was stronger than expected, posting a 1.6 per cent gain to be up [by] 5.7 per cent for the year.”

The total value of loans was up by 0.8 per cent in June.

“Note that a second round of mortgage rate increases for interest-only loans came through late in the month and is likely to impact in coming months,” Mr Hassan said.

He added: “The state detail is of limited use as investor loans are not split out in this release.

“However, a notable point in the loan type detail is the continued surge in construction-related finance approvals.”

Finance for construction was up by 3.6 per cent for the month, and finance for the purchase of newly built dwellings, which includes for settlement of ‘off the plan’ apartment purchases, was up by 3.5 per cent.

“The former suggests non-high-rise construction is likely to lift while the latter is likely related to the wave of high-rise apartment completions,” Mr Hassan said.

“Overall, the numbers will be disappointing for regulators looking for a more material slowing in investor activity, although the full impact of macro prudential measures has yet to come through.”

[Related: Lender increases IO rates by 30bps]

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