Jump in loans for homes

HOME loan approvals showed a surprise lift in July, but a continuing decline in investor loans has underlined the effectiveness of recently introduced lending controls.

The number of owner-occupier home loan approvals rose 2.9 per cent to 56,464, in July, sharply higher than market expectations of 1 per cent.

But the value of total housing finance fell 0.9 per cent to $33.03 billion, according to seasonally adjusted Australian Bureau of Statistics data.

The decline was led by a 3.9 per cent fall in the value of loans for investment housing to $12.06 billion.

CBA economist Gareth Aird said the data showed that overall lending conditions in the housing market had cooled in July.

“The most notable feature in the data was the 3.9 per cent fall in lending to investors,” he said.

“A clear divergence has opened up between the trends in lending to owner-occupiers and investors.”

The Australian Prudential Regulation Authority moved to cap interest-only mortgage lending in the last week of March, prompting a round of rate increases from banks that made interest-only and investor loans more expensive to comply with the new limits.

Owner-occupier lending figures in July were boosted by stamp duty reductions and exemptions for first-time home buyers in Victoria and NSW.