The ABS figures show $11.29b worth of new investment loans were written in April, the lowest monthly total since June 2014.
The total value of new investor loans in April was also 5% lower than the $11.9b written during the month of March.
The value of new owner occupier loans fell 0.3% to $20.7b in April, with the total value of all new loans falling 1.8% to $32b.
The ABS figures support statements made by Reserve Bank of Australia (RBA) Governor Glenn Stevens this week that the efforts by lenders to better regulate the investor lending sector are still having the desired effect.
“Indications are that the effects of supervisory measures have strengthened lending standards in the housing market,” Stevens said following the RBA’s decision to leave the official cash rate at 1.75% on Tuesday.
“Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments,” he said.
While the value of all new loans fell in April, the number of new loans grew by 1.7% to 57,576.
Mortgage Choice chief executive officer John Flavell said the fact there was in increase in the number of new loans written in April shows market activity is still relatively strong.
“The number of loans written for the purchase of established dwellings was also up – climbing 1.3% throughout April,” Flavell said.
“This level of growth is quite impressive and serves to highlight how strong the Australian property market continues to be,” he said.
Over April the number of loans written for the construction of new homes rose 4.4%, while the number of loans written for the purchase of new dwellings rose 3.3%.
Flavell said he expects demand for finance to strengthen in coming months, especially as the effect of last month’s RBA rate cut is felt.
“Over the months ahead, I would expect home loan demand to remain strong, especially as the latest round of home loan interest rate cuts start to filter through the market,” he said.
“With many of Australia’s lenders passing on the Reserve Bank’s rate cut in May, the cost of borrowing has become more affordable than ever before – which will help to keep heat in the market.”
