Australian Investor Mortgage Growth Slows to 17-Month Lowby
Annual investor housing credit expanded at 9.1% in November
Owner-occupier mortgages grow at fastest pace since Feb. 2011
Home loans to Australian landlords grew at the slowest pace in 17 months as a regulatory crackdown forces lenders to raise interest rates and tighten lending standards.
Investor housing credit expanded 9.1 percent in the 12 months to Nov. 30, the weakest pace since June 2014, according to data from the Reserve Bank of Australia. Growth has slowed for the fifth consecutive month, the data show.
Banks are bowing to a directive from the regulator to limit annual expansion in investor mortgages to 10 percent a year to tame record home values in Sydney and Melbourne. The biggest lenders raised interest rates for landlords by 27 basis points in July and raised the minimum deposit required to qualify for an investor mortgage.
An increase in home loans to owner occupiers partially offset the slowdown in loans to landlords, the data show. The measure climbed 6.5 percent in November, the most since February 2011, and marked the sixth consecutive month of increase.
Investors, who, until August, accounted for more than half of new mortgages, were behind the 44 percent rise in Sydney home values over the past three years. Dwelling prices in the country’s largest city fell 1.4 percent, the most in five years in November, according to data from research firm CoreLogic Inc.
Economists from Macquarie Group Ltd. and Bank of America Merrill Lynch forecast a decline in prices over the next two years.