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Owner-occupied lending surges by $13bn: APRA

There has been sustained robust growth in home lending driven by strong owner-occupied lending and faster growth in investor housing, according to data.

The Australian Prudential Regulation Authority’s (APRA) monthly authorised deposit-taking institution statistics (MADIS) for June 2021 has revealed that total residents’ loans and finance leases swelled by $30.1 billion or 1 per cent.

This was largely driven by owner-occupied housing lending, which grew by 1.1 per cent in June 2021, or $13.2 billion.

Investment housing lending expanded at a faster pace compared with previous months, up 0.4 per cent or $2.6 billion (compared with a slimmer 0.1 per cent growth in May).

According to APRA, the “sustained robust growth” in housing lending has continued to reflect strong borrower demand, propelled by record-low interest rates, government measures supporting first home buyers (such as the First Home Loan Deposit Scheme) and new home building, as well as improving employment conditions.

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The Commonwealth Bank of Australia’s (CBA) total loan book grew from $479.1 million in May to $483.6 million in June, driven by an increase in both its owner-occupier portfolio (up from $317.4 million in May to $320.3 million in June), and its investor loan book (up from $161.7 million in May to $163.3 million in June).

CBA’s residents’ loans and finance leases totalled $683.2 million in June 2021.

Westpac investor loans’ portfolio was the largest among the major banks in June, but it fell from $177.2 million in May to $176.6 million in June.

However, its overall loan book increased from $414.1 million in May to $418 million in June, driven by an increase in its owner-occupier portfolio (up from $237 million in May to $241.3 million in June).

The big four bank’s residents’ loans and finance leases totalled $599.3 million in June 2021.

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National Australia Bank’s (NAB) total loan book increased from $265.2 million in May to $268 million in June, with its owner-occupier portfolio rising from $165.2 million in May to $167.6 million in June. Its investor lending book has remained stable at $100.1 million.

NAB’s total residents’ loans and finance leases was at $487.4 million in June 2021.

ANZ’s owner-occupied and investor loan portfolios remained largely stable at $175.4 million and $87.4 million, respectively, with an overall loan book of $262.8 million.

Residents’ loans and finance leases totalled $408.7 million at ANZ in June 2021.

APRA has reported a notable increase in non-financial business lending, up 1.4 per cent in June or $11.3 billion. It said this was largely driven by improved business conditions and financial year-end seasonal factors.

However, business lending looks uncertain moving forward amid COVID-19-related lockdowns introduced in some states (and continuing across Greater Sydney, including the Central Coast, Blue Mountains, Wollongong and Shellharbour).

Other household lending such as fixed-term personal loans fell for the ninth consecutive month, declining by $200 million or 0.2 per cent.

At the same time, the Reserve Bank of Australia (RBA) has released its financial aggregates data for April, which revealed that annual housing credit grew by 0.7 per cent in June compared with a 0.6 per cent growth in May.

For the year ended June 2021, housing credit grew by 5.3 per cent, compared with 3.2 per cent in June 2020.

Business credit grew by 1.6 per cent in June (up from a 0.4 per cent rise in May 2021), and 0.6 per cent in the year to June.

Personal credit posted a monthly decline of 0.5 per cent, and tumbled by 6.3 per cent in the 12 months to June 2021.

The yearly decline marked an improvement on last year’s levels, with personal credit plummeting by 10.7 per cent in the year to June 2020 when Australia was beset by the peak of the COVID-19 crisis.

Total credit grew by 0.6 per cent over the month and 3.1 per cent over the 12 months to June 2021.

[Related: Owner-occupied loans march ahead of investors: APRA]

Owner-occupied lending surges by $13bn: APRA
Owner-occupied lending surges by $13bn: APRA
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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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