The number of lenders with mortgage books in runoff is growing.
According to the latest APRA figures, lenders with books in runoff in December include Bendigo and Adelaide Bank, BNK Banking Corp, Credit Union SA, ING Bank, Greater Bank, Illawarra Credit Union and MyState.
For some, the runoff has been going on for some time. Bendigo and Adelaide, ING Bank, HSBC and Bank Australia have not had any growth for six months.
The runoffs are due to a combination of factors: tighter lending standards in anticipation of rising mortgage stress; lack of attractive offerings in a slowing and highly competitive market; and slow approval turnaround times in a market where distribution is increasingly dominated by brokers.
Among the major banks, ANZ and Commonwealth Bank are growing above system, while NAB and Westpac are lagging. Westpac is growing around half system.
Australian Bureau of Statistics lending data released on Friday show that the value of new housing loan commitments fell 4.3 per cent in December, compared with the previous month. The A$23.4 billion of new lending was down 29.3 per cent on December 2021.
Since January last year, the value of new lending has fallen each month.
The value of new lending to owner occupiers was down 4.2 per cent month-on-month and down 29.8 per cent over 12 months.
New lending to residential property investors was down 4.4 per cent month-on-month and down 28.3 per cent over 12 months.
The value of external refinancing fell 1.5 per cent to $19.1 billion but was second only to the all-time high of $19.4 billion reported in November.
The number of new loan commitments for first home buyers in December, at 7646, was 53.1 per cent below the January 2021 high of 16,307.
The average loan size was $604,346 – the highest amount in five months but below the peak of $615, 054 in May last year.
Reserve Bank data show that lenders’ mortgage balances grew by 0.3 per cent in December and by 6.5 per cent over the 12 months to December. It is the lowest monthly growth rate since August 2020.
Owner occupier loan balances were up 0.4 per cent month-on-month and 6.9 per cent over 12 months.
Investor loan balances were up 0.3 per cent month-on-month and 5.5 per cent over 12 months.