Owner-occupied housing finance has recorded its strongest monthly growth in six years while finance for investment housing has continued to head south.
According to the latest data released by the Reserve Bank of Australia (RBA), owner-occupied lending grew by 0.8% in November, doubling the 0.4% growth in investment housing credit. The growth in investment lending remained steady with its October growth, however the 0.4% growth result is the slowest monthly growth for investment lending in two-and-a-half years. Total housing finance commitments increased by 0.6% over November.
Over the 12 months to November, growth in owner-occupied housing finance increased by 0.3% to 6.5% - its strongest annual growth in almost five years. Growth in lending to housing investors dropped 0.6% over the year, recording an annual growth of 9.1%.
According to an analysis of the RBA data by CommSec, lending to housing investors from banks in November was up by 3.3% over the year, a marked decline from the 17.3% annual growth to June. Over the past six months, many banks announced much tighter investment lending credit policies in an effort to cool annual growth in investment lending below APRA’s guideline of 10%.
Total housing finance grew 7.5% over the 12 months to November, remaining steady at the same annual growth it has recorded since August and equalling the strongest annual growth since October 2010. However, while the total growth in housing finance commitments remains strong, the RBA’s quarterly housing ratio data revealed that the ratio of interest payments on housing debt to household disposable income remained at 6.7% in the September quarter, equalling the lowest ratio in 12 years.