Investor home loans rebound in February at fastest pace in six months
Demand for home loans by investors has rebounded, growing in February at its fastest pace in six months.
Investor lending jumped by 0.6 per cent in February after a 0.3 per cent rise in January.
Over the year, investor lending increased 7.3 per cent, which represents a marginal slowing from the 7.9 per cent reading.
Owner occupier credit growth also came in at 0.6 per cent for the month, the same rate of growth recorded in January.
Overall, housing credit growth remained steady at 0.5 per cent for the month and 7.3 per cent for the year.
ANZ economist Justin Fabo said while there was an element of statistical volatility, the rebound in investor lending suggested the impact on this from last year's regulatory crackdown on investor lending may have largely run its course.
"That said, we do not expect a sharp rebound in investor housing credit growth," Mr Fabo said.
Last year, the banking regulator APRA placed a 10 per cent speed limit on the annualised growth of investor lending by the big banks to take some of the heat and risk out of the housing market.
That led to tighter lending standards as well as an end to heavy discounting in the sector, coupled with a round of out-of-cycle interest rate increases.
The Reserve Bank's broad measure of seasonally adjusted credit — which included housing, personal and business lending — rose 0.6 per cent in February to an annualised growth of 6.6 per cent.
Westpac's Andrew Hanlan said despite the uptick in February, it still represented a loss of momentum, moderating from a peak of 8.5 per cent annualised for the three months to October.
However, business lending was the standout performer, up 0.7 per cent for the month.
"Over the past year, business credit expanded by 6.5 per cent, up from 5.5 per cent a year ago and up sharply from only 2.3 per cent two years earlier," Mr Hanlan said.
"While real investment by the non-mining sectors has been relatively sluggish of late, low interest rates have encouraged investors into existing assets, such as commercial property, in search of yield."
However, Mr Hanlan noted lending for business remains volatile month-to-month and there has been a loss of some business confidence earlier this year.
"Given this, it is doubtful that the strength in business credit evident in February can be fully sustained in coming months," he said.
Source: ABC News