Powered by MOMENTUM MEDIA
finance-advice
1 minute read

Home loan volumes slip despite stimulus

Home loan volumes slip despite stimulus

by Charbel Kadib | December 13, 2019 | 1 minute read

Interest rate cuts and changes to mortgage serviceability guidance have not been enough to spark a quarter-on-quarter increase in home loan volumes, according to the latest APRA data.

APRA
December 13, 2019

The Australian Prudential Regulation Authority (APRA) has released its latest quarterly property exposures data, reporting a decline in mortgage settlements by authorised deposit-taking intuitions with more than $1 billion in assets.

The data revealed that in the three months to 30 September 2019, banks settled $89.4 billion in new home loans, down from $89.7 billion in the September quarter of 2018.

The decline was driven by a slide in the value of new investment loans settled over the quarter, from $27.1 billion to $26.1 billion.

However, owner-occupied volumes also fell, down from $62.5 billion to $62.3 billion.

Advertisement
Advertisement

This came despite a 2.1 per cent increase in the average loan size, from $273,700 in the September quarter of 2018 to $279,400.

The annual reduction in mortgage volumes was reported despite the touted increase in demand for finance off the back of the Reserve Bank of Australia’s (RBA) cuts to the cash rate and APRA’s changes to mortgage serviceability guidance.

Breakdown

The APRA statistics also revealed that, of the home loans settled over the September quarter, $12.4 billion were for interest-only borrowers, down from $14.4 billion in the same quarter last year.

Conversely, the number of mortgages with a loan-to-value ratio (LVR) of 80 per cent or above increased, rising from $18.6 billion to $20.5 billion.

However, the proportion of low-doc loans and loans settled outside of serviceability fell, from a combined $4.79 billion to $3.87 billion.

When broken down by origination source, the proportion of loans originated by the third-party channel remained stable at 50.1 per cent.

In total, the combined residential mortgage portfolio of Australia’s ADIs increased by 2.9 per cent, from $1.61 trillion to $1.66 trillion.

The release of APRA’s property exposure statistics coincided with the publication of its quarterly performance statistics, which revealed that the collective net profit after tax of the ADI sector fell by 4.1 per cent, from $35.8 billion to $34.4 billion.

This comes as several lenders, including the big four banks, have partly attributed declines in their underlying earnings to subdued credit growth.

About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of editorial at Momentum Media and editor of Smart Property Investment.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]com.au

Home loan volumes slip despite stimulus
APRA
spi logo

Subscribe to get the latest news and updates - join a community of over 80,000 property investors.

Check this box to receive podcast updates

From the web

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.