After rising to worrying levels in the first half of 2015, housing loan approvals to investors have fallen back, accounting for 46.2% of total loans in February 2016. In May 2015, a record high of 53.8% of total loan value was issued to investors, prompting warning statements from regulators and ushering in a new, and apparently effective, round of prudential controls on bank lending practices.
Far from causing the end of the housing boom as some pundits anticipated, the tighter controls on investors appears to be assisting first home buyers to enter a market that is beginning to cool. In February 2016, 9.9% of the total loan value went to new home-buyers, up from 9.7% a year earlier.
The chart below shows however that the total value of loans to investors has been more stable in recent months than the value of owner-occupier loans.
To go straight to the dashboard and take a closer look at the data, click here.
The detailed data for loans for purchase or construction of new dwellings is also of interest. That data shows that in February 2016, loans to owner occupiers for construction were valued at $21.391 billion. This was down 1.4% on February 2015 and contrasts with the 18.8% rise over the same period in loans for purchase of new dwellings.
Although valued lower at $13.577 billion, the rise is large enough to signal the next stage in the housing market’s development. Owner-occupiers appear to have moved into ‘trade-up’ mode. This can be seen in the chart below.
To go straight to the dashboard and take a closer look at the data, click here.
It is also easy to note that investors have increased their loans for construction of new dwellings. In February 2016, these loans totaled $13.577 billion, up a very substantial 30.8% compared with the prior year. The data tells us that this growth is largely in apartments, which is part of the over extension risk that concerns regulators and commentators.
Meantime, those who decided to stay put, received approvals valued at $4.04 billion year-ended February 2016, up a solid 10.4% on the prior year. The long, slow upturn in these loan approvals is displayed in the chart below.
To go straight to the dashboard and take a closer look at the data, click here.
