Housing loans to investors picked up to $12.5 billion in October, the highest level in over a year, Australian Bureau of Statistics figures on Friday showed.
The 0.7 per cent increase from September held up overall borrowing numbers even as new owner occupier loans ticked lower, limiting total new home loans to a 0.2 per cent decline to $32.2 billion, seasonally adjusted. Analysts surveyed by Bloomberg were expecting a 1 per cent fall.
Owner-occupier loans dipped 0.8 per cent, however excluding the refinancing of existing loans, lending to owner occupiers rose 0.5 per cent.
Total lending fell in NSW (-2.3 per cent), SA (-1.9 per cent ), WA (-0.2 per cent) and NT (-6.3 per cent). It was flat in Victoria but rose 1.7 per cent in Queensland, 3 per cent in Tasmania and 6.1 per cent in ACT.
The figures, which also showed the average home loan across Australia to be $373,000 in October, down 1.7 per cent on a year ago, painted a sedate picture, CommSec chief economist Craig James said.
"The home finance market is not a driver of interest rates at present," Mr James said. "The Reserve Bank won't be lifting or cutting rates on the lending trends. But with borrowers now looking more carefully at the market, competition across lenders looks likely to heat up."
While overall investor lending was up for the month, the figures revealed the sharp decline in loans for the construction of new investor dwellings - principally apartments.
The monthly total $834.4 million was a 20 per cent decline on the $1.04 billion figure of October last year.
"Finance approvals for the construction and purchase of new dwellings decreased by 5 per cent in [October], marking the second consecutive month of declines," RBC Capital Markets analyst Andrew Scott said.
The figures come as little surprise following separate figures last month showing that planning approvals of new apartments fell to a two-year low in October. A September report said developers were 'slashing' prices of apartments in response to a growing oversupply.
On a rolling 12-monthly basis, total investor loans stood at $138.9 billion, 12.7 per cent below the $159 billion of October last year.
Over the 12 months to October, total mortgage lending stood at $350.7 billion, just below the $352.3 billion at the same month a year earlier. This was the first time since December 2011 - almost five years ago - that the 12-monthly total fell, year on year.
