Owner Occupier versus Investor

In Australia, growth in housing credit has remained steady during 2017; slower growth in lending to investors has been offset by stronger growth in lending to owner-occupiers. While growth in housing lending by the major banks has slowed over 2017, growth in housing lending by smaller lenders has increased.

This partly reflected the response of the major banks to the measures introduced by the Australian Prudential Regulation Authority (APRA) earlier in the year in relation to interest-only lending, which makes up a larger share of lending by major banks than by other lenders. Loan approvals for new dwellings had continued to increase over 2017.

Average lending rates were estimated to have increased slightly over 2017, reflecting higher interest rates for investors and borrowers with interest-only loans. The average interest rate on new variable-rate loans is estimated to be around 30 basis points below that of investment loans.

When did you last review your financial circumstances and ensure you are taking advantage of the best lending structure and interest rates?

Carl Thompson – Commercial Lending Specialist, Strategic Investor Group