The value of loans for housing fell by 1.6% in September, led by an 8.5% drop in the value for loans to investors. The total value of loans approved for housing was down on August’s figure of 3.5% and the turn-around may mark the beginning of the end for the decade-long housing boom. “Owner-occupied” housing loans grew by 3.0% but even then they were down from August’s 6.1% increase. In terms of the number of loan applications approved, loans to owner-occupiers grew by in 2.0, down from the 2.9% increase recorded in August but better than the market forecast.
Goldman Sachs noted the rise in owner-occupier approvals was mostly the result of refinancing while approvals for new construction were “sharply lower over the year” and “ongoing macro-prudential policies have proved effective in curbing investor lending.” The investment bank said this would give policymakers room to cut rates “should the broader demand side of the economy warrant it.”
Back in September AMP’s Shane Oliver thought the new APRA lending guidelines were likely to have an effect on investor lending and this latest batch of loan data seems to be confirming his suspicions. He thinks the latest data points to a definite slowing, event taking into account the reclassification of some investors as owner occupiers.