Lending to housing investors in May was right on the regulator's line in the sand.
The value of investor housing loans rose 0.8 per cent in the month to take growth over 12 months to 10.4 per cent.
The Australian Prudential Regulation Authority said in December that growth in investor loan portfolios "materially above a threshold of 10 per cent" could prompt regulatory action.
If the latest monthly rise were to continue at the same pace for a full year it would deliver annual investor lending growth of exactly 10 per cent.
ANZ economists Daniel Gradwell and David Cannington said the rate of growth "will not be ringing any alarm bells".
But regulators will be keeping a close eye on the industry for any spike in investor lending growth, they said.
JP Morgan economist Ben Jarman does not expect that happen, with more recent industry data suggesting mortgage lending growth has since slowed.
"We should start to see deceleration in housing credit growth, particularly on investor lending, within the next few months," he said.
Commonwealth Bank economist Michael Workman said APRA's heightened surveillance of lending practices may also be having an impact.
"There are some early signs that the changes may be working and that monthly and annual investor housing credit growth may be at their peak in this cycle," he said.
Total credit on the books of lenders in May was $2.4 trillion, up 0.5 per cent from $2.39 trillion in April, according to seasonally adjusted data from the Reserve Bank of Australia.
The increase was in line with the average growth rate of the previous 12 months.
LENDING GROWTH CONTINUES IN MAY
* Total credit up 0.5pct in May and 6.2pct over 12 months
* Total housing loans up 0.5pct and 7.2pct
* Owner occupier home loans up 0.4pct and 5.7pct
* Housing investor loans up 0.8pct and 10.4pct
* Personal loans down 0.1pct and up 0.8pct over 12 months
* Business loans up 0.4pct and 5.2pct
Source: RBA, seasonally adjusted figures
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