Despite repeated attempts by Australia’s regulators to contain the banks and borrowers, residential property borrowing continues to grow, according to the latest government statistics.

Australia’s bill for house borrowing has hit a record $1.69trn, which is greater than the country’s gross domestic product and nearly equivalent to superannuation savings, according to the Reserve Bank of Australia (RBA).

Mortgage brokers claim that overall demand and loan growth remains strong, despite more subdued investor demand in some markets. In fact, investors continue to dominate total property borrowing, despite efforts to encourage owner-occupiers and curtail speculative demand in Australia’s overheating property markets.

John Flavell, CEO of Mortgage Choice, said overall demand is strong and any slowing was probably due to seasonal factors, such as colder weather.

Further complicating the situation is mounting evidence of mortgage fraud. Approximately $55bn worth of interest-only investor loans, or about 10% of the category’s loan book, have been switched to owner-occupier loans in response to a sustained crackdown by the Australian Prudential Regulation Authority (APRA) and lenders, the RBA said.

According to UBS analysts Jonathan Mott and Rachel Bentvelzen, some investment borrowers could be telling their lenders that they intend to occupy the property in order to benefit from the lower interest rates offered to owner-occupiers.

Speed and growth limits have been imposed on lenders to reduce interest-only repayments due to regulatory concerns that lower rates were driving up property prices and exacerbating financial distress.

“Either the regulators are not serious about slowing household debt growth and recent language is simply lip service, or they are hoping their interventions so far will work through, given time,” said Martin North, principal of Digital Finance Analytics (DFA).