The Australian residential mortgage market has officially ticked over $1.3 trillion, with investor lending leading the way on 12.4% annual growth.
The total of residential term loans to households held by all ADIs climbed 1.9% in the March quarter, according to APRA quarterly statistics, reaching a record $1.3 trillion. The total residential mortgage market increased 9% over the 12 months to March 2015.
Investor loans were behind the majority of growth, increasing by 2.6% from the December 2014 quarter. Over the year to March 2015, loans to investors surged 12.4% - well above APRA’s prudential guidelines.
In a letter sent to all ADIs about reinforcing sound residential mortgage lending practices earlier this year, APRA chairman Wayne Byres said any material growth in investor loans over 10% will “likely result in a supervisory response”.
“Given the currently very strong growth in investor lending, supervisors will be particularly alert to plans for rapid growth in this part of the portfolio. For example, annual investor credit growth materially above a benchmark of 10% will be an important risk indicator that supervisors will take into account when reviewing ADIs’ residential mortgage risk profile and considering supervisory actions,” he said.
However, lenders have made considerable steps over the past week towards reducing their exposure to the investor market. All four major banks reduced discounts offered to new investor borrowers. Other lenders, such as Heritage Bank and Bankwest, have even applied LVR caps on investor loans.
According to the APRA statistics, the major banks now hold 81% of the total residential mortgage market and 83% of the investor market.
However, the major banks increased their total market share by just 1.7% over the March quarter and 8.6% over the year to March. Meanwhile, other domestic banks increased their total market share by 4.2% over the quarter and 18.6% over the year.
Do you have more than $200k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out