Investor mortgage lending: is it getting material?

Annual growth in residential property investor loan balances hit 10.4 per cent in March - up from an annual growth rate of 10.1 per cent the previous month. Lenders might be about to find out what the Australian Prudential Regulation Authority means when it talks about portfolio growth "materially above a threshold of ten per cent".

APRA wrote to lenders in December outlining plans to reinforce sound mortgage lending practices.

One issue it was concerned about was strong growth in investor lending. It said it would pay particular attention if investor mortgage portfolio growth was "materially above a threshold of ten per cent."

It said this would be "an important risk indicator" in considering the need for further action.

According to the latest Reserve Bank lending data, housing finance balances grew by 0.6 per cent in March, compared with growth of 0.5 per cent in February.

Over the 12 months to March housing finance balances grew by 7.3 per cent.

Owner-occupier loan balances were up 0.5 per cent in March, compared with the previous month, and grew by 5.8 per cent over the 12 months to March.

Residential property investors' loan balances were 0.9 per cent, compared with the previous months, and grew by 10.4 per cent over the 12 months to March.

The annual growth rate in investor loan balances has increased from ten per cent in December to 10.4 per cent.