Investor cull cools housing lends

THE amount of credit offered to property investors took its biggest monthly fall in more than two years during September in a further sign of a cooling housing boom.

By value, home loans offered to investors fell 6.2 per cent in the month to $11.8 billion, according to new seasonally adjusted figures from the Australian Bureau of Statistics.

The sharp decline more than offset unusually strong lending in August, JP Morgan economist Henry St John said.

“Investor lending was unambiguously weak in September, and provides further evidence August’s modest uptick against the trend was more noise than anything,” he said.

“These numbers will weigh on investor credit growth.”

In March, the Australian Prudential Regulation Authority told lenders to cap interestonly mortgages at 30 per cent of all home loans by value.

That prompted a round of rate increases from banks that made interest-only and investor loans more expensive.

Loans to owner-occupiers slipped 2.1 per cent in September, dragging overall housing finance 3.6 per cent lower to $32.5 billion in the month.

The number of home loan approvals dropped 2.3 per cent in September – expectations were for a 1.5 per cent increase.

ANZ economist Daniel Gradwell said the lending figures and falls in auction clearance rates suggested the housing market would cool further this year and into 2018.