Investor loan growth doubled in March: APRA

Investor lending grew at double the rate in March compared with February, but owner-occupied lending continued to outpace investor lending, new APRA data shows.

The Australian Prudential Regulation Authority (APRA) has published its latest monthly authorised deposit-taking institutions statistics (MADIS) for March 2021, in which it said that total residents’ loans and finance leases increased by $17.5 billion – or 0.6 per cent – in March.

In housing lending, investor lending grew by $1.6 billion, or 0.2 per cent. This is up from the growth rate in February, when the portfolio grew by half as much ($800 million) or 0.1 per cent

Meanwhile, the growth rate of owner-occupied loans also rose in March, increasing by 0.7 per cent or $8.3 billion. This is compared with a $6.3-billion increase in February, or a 0.5 per cent rise.

Commenting on the disparity in flows between owner-occupier and investor loans, APRA said: “The strong growth in housing lending is reflective of strong borrower demand for detached dwellings amid low borrowing costs and supported by government measures such as the First Home Loan Deposit Scheme and the HomeBuilder grant.”

December data from the Australian Bureau of Statistics (ABS) showed that the total number of dwelling units commenced rose by 18.6 per cent, driven by a 20-year high in detached house starts (this rose by 26.6 per cent to 33,761 dwellings).

The mortgage books of most major banks recorded modest increases in loan flows, driven largely by owner-occupied lending. However, three of the four major banks recorded increases in investor lending.

The Commonwealth Bank of Australia (CBA) recorded the largest increase in its owner-occupied lending portfolio out of the big four banks, from around $310.6 billion in February to $312.8 billion in March, while its investor lending portfolio increased from $159.2 billion to $160.0 billion.

CBA edged out its big bank peers, with its total loan book increasing from $469.9 billion in February to $472.9 billion in March.

Westpac occupied second position, with its loan book totalling $409.8 billion in March, up from $408.0 billion in February.

The increase was also driven by owner-occupied loan flows, which rose from around $231.0 billion in February to $232.7 billion in March, while its investor loan portfolio remained stable at $177.1 billion.

ANZ nudged out the National Australia Bank (NAB) to secure the third position among the major banks, but its loan book remained largely stable compared with February at around $263.0 billion.

The lender had $175.6 billion in owner-occupied loans while its investor lending portfolio increased from around $87.4 billion in February to around $87.5 billion in March.

National Australia Bank’s (NAB) mortgage book totalled $262.3 billion in March, up from $261.3 billion in February.

The major bank’s owner-occupied loans book increased from $160.3 billion in February to $161.7 billion in March, while its investment loans remained largely stable, decreasing from $100.9 billion in February to $100.6 billion in March.

Meanwhile, the Reserve Bank of Australia’s financial aggregates data for March 2021 revealed that housing credit growth rate has increased to 0.5 per cent (up from 0.4 per cent in February 2021).

The data (which have been sourced from the Australia Bureau of Statistics, APRA and the RBA) showed that annual housing credit growth was at 4.1 per cent in March 2021, up from 3.2 per cent in March 2020.

Personal credit grew by 0.2 per cent in March, after posting a 0.5 per cent decline in February.

On the other hand, annual personal credit declined at a greater rate in March 2021 compared with a year earlier (down 10.7 per cent in March 2021, compared with a 6.7 per cent decline in March 2020).

Business credit grew by 0.3 per cent in March after remaining stable in February, while annual credit declined by 2.6 per cent after growing by 6.3 per cent in March 2020.

Total credit grew by 0.4 per cent in March 2021 compared with a 0.2 per cent growth rate in February.

However, the annual growth rate declined in March 2021 (0.1 per cent) compared with March 2020 (up 3.7 per cent).

From Mortgage Business

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