According to the ABS figures, $11.5 billion worth of investment loans were written during October, lower than the $12.2 billion written in September.
The Housing Industry Association (HIA) claims the October figures show investor lending has peaked.
“Lending to investors declined for a sixth consecutive month in October, this time by 6.1% to be worth $11.5 billion,” HIA economist Diwa Hopkins said.
“The monthly decline was driven by investors in the established housing market. In contrast, lending to investors in new housing partially recovered previous monthly falls, although the latest level is still below previous peaks,” Hopkins said.
The ABS figures show lending to investors for established housing declined by 8.7% during October, as investor lending for new housing increased by 50.6%, following falls of around 20% in both August and September.
Investor lending over October was 9.2% lower than at the same time last year.
Loans for owner occupied housing increased by 0.4% over the month; however, Hopkins said the next release of figures could paint a different story.
“Lending activity among owner occupiers remained strong in October, although with mortgage interest rate hikes having taken effect in November, we could see this situation change in the months ahead.
“The next update to housing finance will provide the very first glimpse of the impact that this change in credit conditions is having.”
The cooling of investment activity may bring a change in attitude from lenders, after they tightened their policies in the wake of intervention by APRA.
“Lenders are going to ease a bit in what they’re offering and we’re seeing it already,” Phillipe Brach, chief executive officer of Multifocus Properties & Finance, said.
“ANZ are offering a bigger maximum discount for investment loans now… and we’ve seen AMP leave the market completely and then come back to it,” Brach said.