Lending to property investors falls at record pace, as Australians fall behind on home loans
Summary
The value of new loans to Australian property investors fell nearly a third in the September quarter, the steepest quarterly drop in records dating to 2002. At the same time, Commonwealth Bank customers at least 90 days behind on mortgage payments rose to 0.8% of its lending, a 12-year high, though a ratings analyst said the banking sector showed no significant overall stress.Key Facts
- The value of new investor loans fell nearly a third in the September quarter, almost twice the previous largest quarterly decline.
- New lending to owner-occupiers fell 5.3%, while total new lending fell 15%.
- Lending to first-home buyers dropped 8.6% in the quarter.
- New loans to investors building homes fell 12%.
- Commonwealth Bank reported that the share of its borrowers at least 90 days behind on repayments rose from 0.73% to 0.8%.
- The arrears rate was higher than at any point since 2014, according to previous Commonwealth Bank trading updates.
- Australia’s government announced capital gains tax changes and a ban on negative gearing for new landlords buying existing homes.
- The Reserve Bank raised interest rates five times this year, according to the article.
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