By Martin North, cross-posted from the Digital Finance Analytics Blog:
APRA just released their quarterly data on housing exposures of the Authorised Deposit-taking Institutions in Australia for the June 2014 quarter. As at 30 June 2014, the total of residential term loans to households held by all ADIs was $1.23 trillion. This is an increase of $29.7 billion (2.5 per cent) on 31 March 2014 and an increase of $97.2 billion (8.6 per cent) on 30 June 2013. Owner-occupied loans accounted for 66.2 per cent of residential term loans to households. Owner-occupied loans were $811.7 billion, an increase of $16.5 billion (2.1 per cent) on 31 March 2014 and $56.5 billion (7.5 per cent) on 30 June 2013.
ADIs with greater than $1 billion of residential term loans held 98.4 per cent of all residential term loans as at 30 June 2014. These ADIs reported 5.1 million loans totalling $1.21 trillion and an average loan size was approximately $237,000, compared to $230,000 as at 30 June 2013.
There are a number of interesting observations within the data, but the one which stands out is the continued growth in interest only loans. Looking at the new loans written, we see that 43.2% were interest only loans. This is the highest ever, and reflects the growth in investment loans where tax offsets are maximized by keeping the balance as high as possible.
We also see a growth in the number of loans which are approved outside normal criteria. It lifted to more than 3.5% of all loans written in the quarter. At a time when regulators are stressing the importance of good lending practice, this is a surprise, but reflects the fact that larger loans are required by some to chase inflated house prices. 
The proportion of new loans originated via brokers was 43%, based on the value of loans written. This is the highest for 5 years.
Low documentation loans continue to make up only a small proportion of all loans written.
Turning to the portfolio data, (the stock of all loans held by ADI’s) we see the continued growth in interest only loans, to 35% of all loans, the continued fall in low document loans,
The average loan balances across the portfolio for loans with offsets, and interest-only mortgages continues to rise, with the average balance for the latter now at $299,000.
Investment loans across all ADI’s now make up 33.8% of all lending in the portfolio. 
We see that the number of lending entities fell again to 162, highlighting continued concerns about the competitive tension in the industry.
