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Analysts at ANZ note that Australian investor lending was up 5.7% m/m in August ex-refinancing, the second-strongest monthly result since May 2015 and a continuation of investor demand after a 4.7% m/m result in July 2019.

Key Quotes

“Annual growth in investor lending is still sharply negative (-13.0% y/y to July), however this is the smallest negative result in almost two years.”

“Owner-occupier lending grew 1.9% m/m in August ex refinancing. Annual growth is still slightly negative (-1.7% y/y), but it is the smallest negative result since June 2018, when y/y owner-occupier demand growth was still positive.”

“Regulatory easing in July (APRA relaxed the 7%+ floors on mortgage serviceability) has heightened the effects of rate cuts, by allowing lower rates to more directly affect serviceability assessments. Optimism in the housing market following a sharp uptick in Sydney and Melbourne prices may have also spurred on extra demand from investors.”