Time to tighten, APRA

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In December APRA drew a line in the sand for property investment loan lending in which it declared it would consider raising capital charges for any bank growing its investor mortgage book above 10%. Well, time to act, APRA, from the AFR:

NAB’s growth was led by loans to investors, which grew 2 per cent above APRA’s cap at 12.4 per cent, twice its loan growth to owner-occupiers.

…Macquarie Bank has recorded by far the fastest growth in home lending of any institution…For the year to December, its loans to owner-occupiers rose by 62 per cent and to investors by 107 per cent. However, the growth rate is slowing now with owner-occupier home loans up 2.13 per cent and investor loans up 3.14 per cent. This compares to a monthly average growth of 5.16 per cent for owner-occupiers and 8.9 per cent for investor loans.

Perhaps APRA’s challenge is already working. Other banks needing a firm hand include Arab Bank, Bank of China, Defence Bank and Teachers Mutual Bank, all growing above system.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.