Banks report growth in mortgage book amid slowing demand

The Australian Prudential Regulation Authority (APRA) has released its monthly authorised deposit-taking institution (ADI) statistics for January 2023 revealing that total mortgage portfolio reached $2.07 trillion, of which the majority came from owner-occupied loans.

Owner-occupied lending lifted to $1.39 trillion, up from the $1.37 trillion reported in December up 0.96 per cent.

Investor lending for homes lifted to $677 billion, up from $673.8 billion.

Specifically for the big four, the monthly residential owner-occupied continued to increase for the month, according to APRA data.

CBA reported $358.8 billion, up more than $2 billion from last month, plus $176.4 billion in investment housing loans.

Westpac Banking Corporation (Westpac) saw its owner-occupied home loan book grow to $287.2 billion, up from $286.7 the previous month.

The major bank’s investment home loans lifted slightly to $154.7 billion.

National Australia Bank (NAB) reported owner-occupied housing loans for January reached $197.9 and housing investment loans of $107.7 billion, up from last month’s results.

Australia and New Zealand Banking Group Limited’s (ANZ) owner-occupied home loans tipped over $180 billion ($180.5) with investor lending reaching $91.5 billion.

The lift in home lending in January preceded a pause in the Reserve Bank of Australia’s (RBA) monetary policy meetings. However, it marked a 300-bp rise to the cash rate for the year, taking the cash rate to 3.1 per cent.

Demand for new lending eases

Despite banks’ mortgage books increasing overall, a slowdown in demand is beginning to appear in lenders’ results, given mortgage confidence had hit its lowest in three years.

For example, the Commonwealth Bank reported an 18 per cent drop in new mortgages in the first half of the 2023 financial year.

This has been reflected in the non-bank lending space as well, with new originations slowing in the second half of the calendar year for Pepper Money and Liberty reporting a $1.7 billion drop in the first half of 2023.

NAB’s first quarter trading update for 2023, reporting lending and deposits, both increased by 1 per cent for the three months to December 2022.

But it expected the slowing economy as rising interest rates would cause “difficulties for some customers”.

[Related: Banks mortgage book hit $2tn in December: APRA]

Kate Aubrey is the senior content producer of Momentum Media's mortgages titles: The Adviser and Mortgage Business.

Prior to joining Momentum Media, Kate covered regional and breaking news for ABC Radio for more than three years.

She has a Master of Arts in Journalism from the University of Melbourne and a Bachelor of International Business and Business Management from Griffith University.

Email Kate at: This email address is being protected from spambots. You need JavaScript enabled to view it.