Mortgage lending to property investors continued to exceed the 10% annual growth speed limit imposed by banking regulators in May, according to the latest private credit data from the Reserve Bank.
The RBA data, released yesterday, showed housing investor credit growth remained at a seven year high of 10.4% in the year to May, unchanged from the three preceding months.
Banks have undertaken to cut the pace of their lending to investors to an annual growth rate of 10% or lower, and while the regulators are confident that will happen, there have been hints recently that specific action may be needed if the slowdown doesn’t start appearing soon.
May figures showed total annual home lending growth – including the owner-occupier segment – was steady in May at 7.2% – loans to owner occupiers are growing at 5.7%.
May also saw the Commonwealth Bank, Westpac, ANZ and NAB all move to slow their lending to investors, including reducing the lucrative interest rate discounts offered to investors.
Among the major lenders, Westpac, ANZ Bank and National Australia Bank all expanded their housing investor loan books at more than 10% in the year to May, separate APRA data released yesterday showed.
NAB, which has the smallest home loan book of the major banks, has been growing quickest of the big four.
The RBA lending data also showed a pick up in business loans, up 0.4% in May after no growth in April.
That pushed the annual growth in business loans to 5.2%.
Still in property and industry figures yesterday showed a surprise dip in new home sales in May.
According to the Housing Industry Association, new home sales fell 2.3% in May, the first monthly fall in 2015 so far, thanks to a sharp drop in sales of detached houses.
“This is a softer result at face value, but delving beneath the surface reveals an aggregate profile of healthy new home building conditions in 2015,” HIA chief economist Harley Dale said in a statement yesterday.
“The decline was driven by a … dip in detached house sales, reflecting weaker monthly demand in four out of the five states surveyed,” he said.
Detached house sales fell 5.1%, but multi-unit sales were up 7.6%.
Later today we get the house price data from CoreLogic Rp Data for June, the June quarter, half year and the financial year, as well as building approvals for May.
