Positive uptick in home lending: APRA

Total residents loans and finance leases increased by $25.7 billion (or 0.8 per cent) in May, driven in part by “growth in home lending”, according to the Australian Prudential Regulation Authority’s (APRA) monthly authorised deposit-taking institution (ADI) data.

The regulator said banks reported an $8.5 billion (or 0.6 per cent) increase for owner-occupied loans and a $3.3 billion increase (or 0.5 per cent more) in investor lending.

Looking at the big four banks, ANZ’s total home loan book came in at $261.1 billion , up from $260.6 billion in April, with the group reporting $172.5 billion in its owner-occupier book.

The Commonwealth Bank saw the biggest rise month-on-month, with the bank’s total home loan book coming to $516.5 billion , up from $514.5 billion in April.

This was largely driven by its owner-occupier book that crept up $343 billion .

NAB’s total mortgage book grew to $289.2 million, slightly higher than last month’s $287.5 billion, with owner-occupier loans accounting for $184.9 billion .

Westpac on the other hand has seen a dip in its investor loans ($153.4 billion in May) after regaining ground in April with $153 billion investor loans. 

However, overall the bank home loan book climbed to $429.7 billion.

Despite the Reserve Bank of Australia (RBA) making its first cash rate hike in 22 years in May, the regulator also reported “continued strength in business conditions” following a $10.5 billion increase in lending to non-financial businesses.

In line with a rising rate environment, the report showed household savings had slowed corresponding with an increase in household deposits that went up $2.4 billion (or 0.2 per cent) in May.

The increase in household deposits indicated some stabilisation following a period of “strong growth” over the lockdown period, the regulator said.

The regulator also reported total residents assets increased by $19.8 billion (or 0.4 per cent) in May, largely driven by the increase in loans and finance leases.

Meanwhile, short-term borrowings increased by $3.7 billion (or 1.0 per cent), while long-term borrowings increased by $11.9 billion (or 2.4 per cent) in May.

Third-party originated loans rise

The third-party channel continues to write more loans, with the financial regulator reporting nearly 58 per cent of loans funded by banks are originated by the third-party channel, for the quarter ended 31 March 2022.

According to the APRA’s Quarterly Authorised Deposit-taking Institution (ADI) Property Exposures publication, the 57.5 per cent of all term loans funded in the March quarter (or $83.4 billion) were third-party originated.

This was up from 53.6 per cent in the same quarter the year prior and is near the record-high broker share recorded in the two prior quarters, which comes as record numbers of borrowers turn to mortgage brokers for support.

Research commissioned by the Mortgage & Finance Association of Australia (MFAA) found that mortgage brokers facilitated 69.5 per cent of all new residential home loans in the three months to March 2022 as more borrowers turn to brokers.

[Related: ANZ mortgage book continues decline]