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Investor lending continues rise: APRA

Loans for investment property continue to gain pace, while owner-occupied lending slowed in April, according to new APRA data. 

The latest monthly authorised deposit-taking institution (ADI) statistics from the Australian Prudential Regulation Authority (APRA) have shown that total residents loans and finance leases increased by 0.2 per cent ($6 billion) over the month of April.

In home lending, owner-occupied loans grew by $6.9 billion or 0.6 per cent. However, the rate of growth continues to slow, having previously increased by 0.7 per cent ($8.3 billion) in March.

Investor lending has also continued its upward trajectory, with investment lending increasing by $2.1 billion or 0.3 per cent in April. This increased on March’s growth rate, when it rose 0.2 per cent ($1.6 billion).

“Recent growth in housing lending continues to reflect strong borrower demand underpinned by low mortgage interest rates and government measures supporting first home buyers and new home building,” the APRA report noted.

CBA retained the largest increase in its owner-occupied portfolio out of the big four banks, from $312.8 billion in March to $315 billion in April, while its investor loans increased to $160.8 billion from $160 billion the month before.

The bank’s total residents loans and finance leases came to $672 billion in April, including $475.8 billion in its total loan book.

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Westpac had the second largest owner-occupied book in April, growing to $233.4 billion as at the end of April, but it also topped out all four majors in investor loans, with its figure of $178 billion. The bank’s total loan book came to $411.4 billion, up from $408 billion in March.

ANZ’s total loan book was $262.8 billion in April, somewhat declining on the previous month’s $263 billion. The lender had $175.4 billion in owner-occupied loans, while its investor lending portfolio slipped, to $87.4 billion from March’s $87.5 billion.

NAB’s book grew to $263.4 billion as at the end of April, up from $262.3 billion in March. The major bank had $163.2 billion in owner-occupied loans and $100.2 billion in its investor total.

Overall, business lending (loans to non-financial businesses) slipped by 0.1 per cent ($1.2 billion), pivoting from its sharp increase in March.

But APRA has forecast the outlook for business lending will be supported by Australia’s stronger than expected economic recovery, high business confidence and government policy measures, including the recent extension of the instant asset write-off scheme.

NAB had the largest volume of loans to non-financial businesses as at the end of April, with its total of $173.2 billion. CBA came in second, with $141.4 billion, followed by Westpac ($125.4 billion) and ANZ ($114 billion).

Similarly, loans to all other counterparties, including financial institutions and general government decreased in April.

Meanwhile, the Reserve Bank of Australia’s financial aggregates data for April revealed that annual housing credit growth came to 4.4 per cent for the year ended in April, compared with 3.2 per cent in the year to March.

Business credit took a fall of 3 per cent, turning after a 6.5 per cent spike for the 12 months to March.

Personal credit dropped by 7.8 per cent, in contrast to a fall of 9.6 per cent in the year to March.

Total credit grew by 0.2 per cent in April, compared with 0.4 per cent in March. For the year for April, the rate of growth had fallen to 1.3 per cent, from the rate of 3.5 per cent for the 12 months to March.

The APRA data showed that credit card lending declined by 1.1 per cent ($300 million) over April, with overall levels around 20 per cent lower than they were prior to COVID-19.

Other household lending, such as fixed-term personal loans, also fell by $400 million in April, or 0.6 per cent, reaching a new low in APRA’s records.

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