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Home lending for investors has slowed down for the year to December 2017 in what could be a result of regulatory measures to reduce lending supply to investors.
RBA’s credit aggregate data released yesterday (31 January) shows that house lending for investors grew 6.1%, seasonally adjusted, in the 12 months to December 2017, down from 6.2% from a year ago.
By monthly growth, investor lending recorded a seasonally adjusted growth of 0.3% in December, lower than the 0.4% of the previous month.
Analysts have largely expected growth in mortgage lending to slow this year amid tougher lending practices, under-employment, and lower investor demand.
Besides added restrictions on lending, borrowers are also facing tougher serviceability criteria, limiting their access to mortgages.
Last year, APRA capped the amount of new loans that can be interest-only at 30% after limiting the growth of investment lending up to 10% per year in 2014. It also called on banks to make sure serviceability metrics are set at appropriate levels and to continue to limit lending growth in high-risk segments, including high loan-to-income loans and high LVR loans.
Nonetheless, mortgage lending continued to see the biggest growth in credit. It went up 6.3% for the 12 months to December 2017 – the same as the previous year.
Lending for business grew 3.2% for the year to December 2017, lower than the 5.6% of the previous year.
Personal lending was down 1.1% for the same period.
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