Major banks split on mortgage portfolio growth

The Australian Prudential Regulation Authority (APRA) has released its latest monthly authorised deposit-taking institutions statistics (MADIS), which, for the third consecutive month, has revealed a considerable disparity in the home lending performance of the major banks.

The mortgage portfolios of ANZ and the Commonwealth Bank of Australia (CBA) posted a combined total growth of around $5.3 billion over September, driven by an increase in owner-occupied lending.

ANZ recorded a $2.8 billion increase in its total mortgages portfolio, increasing from $254.4 billion in August to $257.2 billion in September.

Owner-occupier lending for the bank increased from $167.5 billion in August to $171.8 billion in September.

However, investor lending decreased from $86.9 billion in August to $85.3 billion in September.

CBA recorded a $2.5 billion rise in its mortgages portfolio, from $456.5 billion in August to $459.0 billion in September, also driven by a jump in owner-occupier lending.

This segment increased from $299.2 billion in August to $301.1 billion in September.

Investor lending at CBA remained largely stable at $157.9 billion in September, up by around $1 billion from $156.9 billion in July.

In contrast, both National Australia Bank (NAB) and Westpac reported contractions in their mortgage portfolios, decreasing by $700 million each over September.

NAB posted $260.4 billion in its total mortgages portfolio in September, down from $261.1 in August, driven by a decline in investor lending.

Investor lending decreased by $1 billion, from $105 billion in August to $104.0 billion in September, while owner-occupier lending increased marginally from $156.1 billion in August to $156.4 billion in September.

Westpac’s total mortgages portfolio contracted from $406.0 million in August to $405.3 billion in September, driven by slight declines in both owner-occupier and investor lending.

Owner-occupier lending decreased from around $229.0 billion in August to $228.7 billion in September, while investor lending decreased from $177 billion in August to $176.6 billion in September.

The APRA data has followed the October 2020 State of the States report from CommSec, which showed that housing finance commitments have reached above decade averages across Australia, while beating last year’s levels.

Mortgage and dwelling approvals rise

The Australian Bureau of Statistics (ABS) has also released its Lending Indicators and Building Approvals data for September.

According to the figures, the total value of home loan approvals (seasonally adjusted) rose 5.9 per cent in September.

This rise was driven by a surge in the value of owner-occupier home loan commitments, which jumped 6.0 per cent to $17.3 billion in September.

Around half of the rise in September’s owner-occupier housing loan commitments was for the construction of new dwellings, which surged 25.3 per cent, following a 19.2 per cent rise in August.

Commenting on the trends, ABS head of finance and wealth, Amanda Seneviratne said: “Owner-occupier housing loan commitments are at historically high levels, consistent with low interest rates and government incentives.

“For example, it is likely that the HomeBuilder grant is contributing to increased demand for construction loans.”

Meanwhile, the number of dwellings approved swelled 15.4 per cent in September (seasonally adjusted terms).

According to ABS director of construction statistics Daniel Rossi, this increase was driven by private sector dwellings excluding houses, which rose 23.4 per cent, while private sector houses rose by 9.7 per cent in September, the third consecutive monthly increase.

However, the value of total building approved fell 17 per cent in September (seasonally adjusted terms).

The value of non-residential building fell 36.7 per cent, driven by the public sector, following a strong August result.

The value of total residential building fell in September (0.7 per cent), which included a 1.0 per cent fall in new residential building, and a 1.1 per cent rise in alterations and additions.

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