Investor mortgage lending had its biggest fall in two years, with the value of home loans to investors nose-diving 6.2 per cent in September to $11.8 billion, according to data from the Australian Bureau of Statistics.
The weakness was also there for first home buyers and owner occupiers.
Lending to owner-occupiers slipped 2.1 per cent and first home buyer commitments crept up marginally by 0.2 per cent to 17.4 per cent.
The sharp decline followed strong lending in August and is a sign that the Australian Prudential Regulation Authority’s macro-prudential controls to reign in the soaring housing market is having an effect.
The Australian Prudential Regulation Authority (APRA) started to cap interest-only mortgage lending in the last week of March.
That encouraged a round of rate increases from banks that made interest-only and investor loans more expensive.
“APRA’s macro-prudential policy, aimed at investors and interest-only loans in particular, appears to be having the desired effect of taking some investor demand out of the market,” ANZ senior economist Daniel Gradwell said.
“While household debt is still growing faster than income, developments such as this allow the regulator and RBA to be patient.”