Australia’s housing market continues to ease, with latest data showing a one per cent drop in home lending.
The value of mortgages for owner-occupiers fell from $21.058 billion in May to $20.846 billion in June, according to seasonally adjusted figures from the Australian Bureau of Statistics.
KPMG’s chief economist Brendan Rynne says this is further evidence of a slow down in borrowing this year, with owner-occupier lending dropping five per cent for the year to June.
ABS data released on Wednesday showed loans for investors have fallen 2.7 per cent from last month and just over 18 per cent for the year to June.
Mr Rynne says recent APRA demands for banks to adopt stricter lending requirements – including on interest-only loans – have cut back the level of investor borrowing.
“A major reason APRA did this was because investors were taking an increasing size of the market, with nearly 45 per cent of all housing financing being taken up by investors during 2014,” Mr Rynne said in a research note.
“In comparison, during the fifteen year period 1998 to 2013, investors represented only one-third of housing financing activity.”
Lending to investors is now back down to 35 per cent, a figure Mr Rynne said regulators and policymakers would be more comfortable with.