The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
UPCOMING EVENT - LAND LEASE DEVELOPMENT SUMMIT 10 DAYS TO GO
10 DAYS TO GO - LAND LEASE DEVELOPMENT SUMMIT
REGISTER NOWREGISTER
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OtherStaff WriterMon 16 Oct 17

RBA Minutes Reveals Less Lending to Investors as Residential Construction Eases

iStock-688344538_620x380

The Reserve Bank published the minutes of their board meeting on Tuesday, recording a plateau in residential construction and stable housing credit growth as the Australian economy expanded by 0.8 per cent in the June quarter.

The Reserve Bank noted that Australia’s housing market conditions continued to ease in Sydney and Melbourne, but had been broadly unchanged in other cities.

Housing prices continued to decline gradually in Perth, while prices around Australia increased by around 9 per cent over the year to September.

Australian housing credit growth was relatively stable over 2017, with slowing growth in lending to investors offset by slightly higher growth in lending to owner-occupiers.

Little change was recorded in Australian banks’ variable lending rates over September, although some banks had lowered interest rates on fixed-rate loans, with the largest declines for fixed-rate interest-only loans to investors.

Regulators took measures this year to curtail riskier borrowing for housing -- such as the introduction of a 30 per cent cap for interest-only lending as a share of new lending by APRA early in 2017. This resulted in a substantial decline in interest-only lending, while the share of lending at loan-to-valuation ratios exceeding 90 per cent had also declined.

[Related reading: Bank ‘Blacklists’: A Classic Case of Cutting Off the Nose to Spite the Face]Australian banks continued to tighten their commercial property lending standards and their overall commercial property exposures had declined a little over the preceding year.

This was offset by strong growth in the commercial property exposures of Asian banks in Australia. Unlike previous episodes of strong expansion in lending by foreign banks, this had not seemed to have led to an easing in lending standards by Australian banks.

Australia's residential construction suggested it had plateaued, with dwelling investment largely unchanged in the June quarter. The pipeline of work already approved or under way was expected to continue supporting dwelling investment around current levels over the subsequent year or so with the peak of apartment completions expected to occur during this period.

[Related reading: What Will The Construction Downturn Actually Look Like?]At the current level of dwelling investment, growth of the housing stock was expected to outstrip that of the population, as it had done in the preceding few years.

Apartments stood out as a dwelling type growing in popularity, with a large number of apartments were expected to be completed in 2018 and 2019 in the largest cities, following several years of increasing apartment construction.

Strong population growth had seen demand for inner-city apartments in Melbourne absorb the city’s large increase in supply. Generally, demand for smaller apartments targeted at foreign buyers in the major cities had eased. Prices and rents of inner-city apartments had fallen slightly in Brisbane and also in Perth, where economic conditions were weaker.

The RBA Board left the cash rate unchanged at 1.5 per cent.

ResidentialAustraliaFinanceReal EstateLegalSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Starchitect Ivan Harbour on the Power of Small Spaces

Taryn Paris
6 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
View All >
The Devwest twins are planning their next project, a $110 million office building in Perth with WA Government tenants already lined up as part of public sector reforms.
Office

Devwest Twins Plot $110m Office Tower in Perth CBD

Renee McKeown
138 Barkers Road HERO
Placemaking

SPG Founder Seeks Density Boost for Hawthorn Super Lot

Leon Della Bosca
Exclusive

Starchitect Ivan Harbour on the Power of Small Spaces

Taryn Paris
He’s created some of the world’s best landmarks, but the architect says public realm is the most important part of a pro…
LATEST
The Devwest twins are planning their next project, a $110 million office building in Perth with WA Government tenants already lined up as part of public sector reforms.
Office

Devwest Twins Plot $110m Office Tower in Perth CBD

Renee McKeown
2 Min
138 Barkers Road HERO
Placemaking

SPG Founder Seeks Density Boost for Hawthorn Super Lot

Leon Della Bosca
3 Min
Exclusive

Starchitect Ivan Harbour on the Power of Small Spaces

Taryn Paris
6 Min
Office

Top 5 Office A-REITS in 2025

Shravanth Reddy
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/reserve-bank-less-lending-investors-more-owner-occupiers