Investor loans fall sharply as lending tightens
Wednesday, 08 June 2016

Loans to property investors fell five per cent in April, breaking a six-month upward trend, suggesting recent efforts by regulators to curb loans is working.
The monthly total of new investor loans was just under $11.3 billion, the latest Australian Bureau of Statistics showed on Wednesday. This total is down from March's $11.9 billion and the lowest level since June 2014. 
The drop in investment lending dragged the overall monthly total of new housing finance down 1.8 per cent in April to $32 billion.
The data comes just one day after the Reserve Bank of Australia made a concerted effort to calm the recently hot property investment market. 

"The RBA yesterday really played down recent strength we've seen in the housing market," said Felicity Emmett, head of Australian economics at ANZ.
"And that's certainly something that would be complicating the monetary policy view at the moment."
"Today's number reverse some of that strength so I imagine the RBA probably feels marginally more comfortable."
In his statement following the bank's decision to keep interest rates on hold, Governor Glenn Stevens pointed to an oversupply of apartments in the next few years as a dampener on the recent dwelling price rise.
He also observed that tightening lending standards have curbed investment lending. 
"Indications are that the effects of supervisory measures have strengthened lending standards in the housing market," said Mr Stevens.
"Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments."
While Ms Emmett says it's too soon to say this month's fall in investor borrowing is a direct result of the regulator's recent curbs on loans, she does point to weakness in the market last year, following the regulator's moves to place pressure on lenders. 
"That earlier weakness in investor lending earlier last year was definitely in response to the tightening up on lending standards," said Ms Emmett. "But then we've seen this pickup and so it was questionable about what was driving that.
"I don't think with one fall we can say, this is the regulator coming through. I think we have to watch the trend."
Last month, loans to investors rose 1.5 per cent to their highest levels in six months.
Loans to owner-occupiers were fairly flat at $20.7 billion. Excluding owner occupier refinancing loans, the monthly total fell 2.6 per cent to $13.4 billion. 
The figures, which reflect the state of lending after last month's interest rate cut, remain well below the highs of last year. 
This data comes as weekly rents remained unchanged across the combined capital cities in May 2016. According to the CoreLogic May Rent Review, combined capital city rental rates are $486 a week for houses and $469 a week for units.
Weakness in Perth, Darwin, Brisbane and Adelaide offset moderate rises in Sydney, Melbourne, Hobart and Canberra.

Source From: www.smh.com.au