The latest quarterly property exposures statistics published by the Australian Prudential Regulation Authority (APRA) have revealed that the overall value of loans approved by authorised deposit-taking institutions (ADIs) fell by 16.4 per cent ($14.3 billion) in the three months ending 31 March 2019, from $86.7 billion in the March quarter of 2018 to $72.4 billion.
The overall slide in home loan volumes was driven by a 15.2 per cent ($9.2 billion) drop in the value of new owner-occupied home loans, from $60.2 billion in the March quarter of 2018 to $51.1 billion.
The value of new investment home loans also fell, down 8.7 per cent ($5.1 billion), from $26.4 billion to $21.3 billion over the same period.
The APRA data also reflects the continued tightening of the risk appetite of ADIs, with the value of new interest-only loans falling by 21.3 per cent ($2.9 billion), from $13.6 billion to $10.7 billion.
Further, the value of new loans approved outside serviceability declined by 26.1 per cent ($1.1 billion), from $4.2 billion to $3.1 billion as at 31 March 2019.
The value of new low-doc loans fell sharply, dropping by 60.8 per cent ($137 million), from $225 million to $88 million.
The total value of Australia’s residential mortgage book (excluding non-banks) increased by 4.4 per cent ($7 billion), from $1.59 trillion to $1.66 trillion.
Bank profits slide
APRA has also released its quarterly ADFI institution performance statistics, which revealed that the collective net profit after tax of Australia’s banks fell by 12.6 per cent ($1 billion), from $8.31 billion in the March quarter of 2018 to $7.26 billion in the March quarter of 2019.
When assessed on an annual basis, the collective net profit after tax of Australia’s ADIs dropped by 4.1 per cent ($1.6 billion), from $36.1 billion in the 12 months ending 31 March 2018 to $34.5 billion in the 12 months ending 31 March 2019.
The annual profit fall was sparked by a 2.9 per cent ($3.2 billion) decline in total operating income, from $109.2 billion to $106 billion.
Total operating expenses also increased, up 2.8 per cent ($1.5 billion), from $52.5 billion to $54 billion.
[Related: RBA lauds ‘effective’ tightening of lending standards]