Investor lending ticks up in July

According to the ANZ Australian Economics Quick Reaction for July, investor lending rose by 0.5 per cent month-on-month.

Meanwhile, owner-occupier lending (excluding owner-occupier refinancing) fell by 4.5 per cent month-on-month.

“While the value of housing finance commitments fell in July, this was entirely driven by owner-occupiers as investor finance continued to rise,” ANZ commented.

“This is the third month in a row where investor borrowing diverged from owner-occupier lending, suggesting to us that investors are driving the recent pickup in housing demand,” it said.

ANZ noted in the survey that tighter lending conditions for developers are beginning to weigh on finance for the construction of new housing, however investor finance for housing construction has “rolled over”, suggesting that a peak in building approvals is being approached.

“However, the record backlog of work remaining will continue to underpin further growth in construction activity over the year,” the bank said.

ANZ also highlighted that the total lending in July predates other, more positive data that is being seen in the housing sector.

“There has been renewed strength in house prices and auction clearance rates through August and so far, in September.

“In our view, this suggests that the drop in finance is likely to be temporary.”

[Related: Major lender sounds warning on housing market]