New research suggests that Australia’s property investors should watch their home loan interest rates, and that new investors will find it more difficult to secure an investment loan.
One of Australia’s biggest comparison websites, finder.com.au, analysed data from the Australian Prudential Regulation Authority (APRA) released Friday. It said that 16 banks have grown their investment home loan lending by more than 10% in the past year to June 2015, including three of the four major banks: ANZ, Commonwealth Bank and NAB.
The report added that banks have collectively increased their investment lending by 16.5% in June 2015 compared to the same period last year. APRA has monitored a total of investment loans by 73 banks and saw a growth of $435.7bn in June 2014 to $507.4bn in June 2015.
Moreover, investment lending in the past year has grown more than three times that of their owner-occupied lending. These banks have collectively grown their owner-occupied books by just 4.5% (compared to 16.5% for investment loans), from $829.9bn in June 2014 to $866.8bn in June 2015.
“While APRA has implemented measures to curb investment lending growth, many banks have clearly not responded as their lending has continued to rise,” said Michelle Hutchison, Money Expert at finder.com.au.
“In fact, 16 banks have increased their investment lending by more than APRA’s recommended 10 percent growth rate in the past year, including some of our biggest banks.”
Macquarie saw the biggest increase in investment lending growth by 81.6% to $9.0bn due to acquiring loans books from other institutions.
ANZ came up second with 51.4% year-on-year to $83.5bn.
However, Westpac, the biggest investment lender in Australia, grew its investment lending by just 9.9% in the past year to June 2015, to $152.5bn.
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