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Owner-occupied growth drops more than 60%: APRA

Australia’s banks issued just under $3 billion in owner-occupied mortgages in July, two thirds less than the month before, according to new data.

The Australian Prudential Regulation Authority (APRA) has released its monthly authorised deposit-taking institution (ADI) statistics for July 2023, revealing that the total mortgage book of Australian ADIs has remained relatively steady at $2.11 trillion.

However, both owner-occupier and investor loan book growth had eased over the month.

Throughout July, the volume of owner-occupier loans held by Australian banks increased by 0.20 per cent, rising from $1.42 trillion to $1.43 trillion, around $3 billion.

While the books rose, the pace of growth dropped by around 66 per cent on the month prior.

For example, APRA stats show that in June 2023, there was a $9.3 billion rise in owner-occupier loan book growth.

Meanwhile, investor loan books grew from $686 billion to $687 billion, marking a $1 billion increase, also showing a slowdown.

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Which banks gained and lost?

The Commonwealth Bank of Australia (CBA) encountered the most significant setback in its mortgage portfolio among the major banks.

By the end of July, CBA’s total mortgage book reached around $544 billion, marking a drop of $1.9 billion compared to the preceding month’s $2 billion increment.

Notably, CBA’s owner-occupied book declined to $364.3 billion, down from the previous months reported $366 billion.

The bank’s investor book also experienced a marginal decline, reaching $180 billion.

In the major bank’s financial results year ended 30 June 2023 (FY23) it highlighted an easing in new lending as well as a fall in broker originations over the financial year.

The Australia and New Zealand Banking Group (ANZ) observed its total mortgage book expanding to roughly $281.1 billion from $280.3 billion – an increase of $300 million.

Similarly, this stood in stark contrast to the $2 billion growth over the prior two months.

ANZs owner-occupied book amounted to $187.1 billion, while its investor loan book reached $93 billion.

National Australia Bank (NAB) also experienced a notable slowdown in growth, with its total mortgage portfolio reaching $310 billion – a $158 million rise. This indicated a drop from the $1.6 billion growth witnessed in the preceding month.

NAB’s owner-occupied lending reached $201.5 billion, slightly higher than the previous month, while investor lending decreased to $108.7 billion from $108.8 billion.

Meanwhile, the Westpac Group (Westpac) witnessed one of the most substantial surges among major banks, as reported in its financial report, with its mortgage book growing by $2.3 billion, reaching $451.4 billion compared to $449 billion in the prior month.

Westpac’s owner-occupied portfolio escalated to $295 billion in July, up from $293 billion, while the investor portfolio expanded to $156.4 billion.

Across the board, new mortgage lending has been slowing as a result of higher interest rates. While the Reserve Bank of Australia (RBA) held the official cash rate in July (at 4.1 per cent), the impact of the 25-basis-point rise in both May and June would have been filtering through in July 2023.

With inflation growth having slowed, it is expected that the central bank may now be near the peak of its tightening cycle.

[Related: ADIs wrote $9.3tn of owner-occupier loans in June]

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