Home loan approvals have shown a surprise lift in July, but the continuing decline in investor loans has underlined the effectiveness of recently-introduced lending controls.
The number of owner-occupier home loan approvals rose 2.9 per cent, to 56,464, in July, sharply higher than market expectations for an increase of 1.0 per cent.
The value of total housing finance, however, fell 0.9 per cent to $33.03 billion in the month, seasonally adjusted data from the Australian Bureau of Statistics showed.
The decline was led by a 3.9 per cent fall in the value of loans for investment housing to $12.06 billion.
Loans approved for owner-occupied housing continued to rise, up 0.9 per cent in July to $20.96 billion.
CBA economist Gareth Aird said the data showed that overall lending conditions in the housing market had cooled in July.
"The most notable feature in the data was the 3.9 per cent fall in lending to investors," he said.
"A clear divergence has opened up between the trends in lending to owner-occupiers and investors."
The Australian Prudential Regulation Authority (APRA) moved to cap interest-only mortgage lending in the last week of March, prompting a round of rate increases from banks that made interest-only and investor loans more expensive in order to comply with the new limits.
JP Morgan economist Henry St John said the decline in investment lending was consistent with the trend seen over the past few months.
"Investor lending values have now declined 11.3 per cent over the last six months, and the annual run rate is now effectively flat," he said.
Owner-occupier lending figures in July were boosted by stamp duty reductions and exemptions for first-time home buyers that were introduced in Victoria and NSW from July 1.
"At this point, it is difficult to discern a clear trend in owner-occupier lending activity, but this category should be less affected than any other by prudential tightening, and has also not been cyclically important," Mr St John said.
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