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Australian banks’ total mortgage portfolio surpasses $2 trillion, as owner-occupied lending continues to lift.
The Australian Prudential Regulation Authority (APRA) has released its monthly authorised deposit-taking institution (ADI) statistics for April 2023 revealing significant growth in the total mortgage portfolio of Australian banks.
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The data supports the Reserve Bank of Australia’s financial aggregates report on home lending for April 2023, which highlighted a 0.6 per cent increase compared to the previous month and a substantial 6.6 per cent surge over the past year.
According to APRA’s data, owner-occupied lending experienced a notable rise, with an increase of approximately $5.5 billion to reach a total of $1.41 trillion in April 2023.
The data also showed investor lending reached $683 billion, taking Australian banks’ mortgage portfolio to $2.090 trillion.
The report indicated that all four major banks reported an upturn in their home loan portfolios during the same period, demonstrating a sustained growth trend in home lending.
The Commonwealth Bank of Australia’s (CBA) total mortgage portfolio reached $542.1 billion, reporting more than $1.4 billion increase in its owner-occupied mortgages to $363.8 billion.
CBA’s investor loan book lifted marginally to $178.3 billion.
Similarly, National Australia Bank (NAB) reported growth in both owner-occupied housing loans and investor loans for April 2023.
Owner-occupied housing loans increased to $199.3 billion from the previous month’s $198.7 billion, while the investor portfolio rose to $108.1 billion from $107.9 billion in March.
Westpac Banking Corporation (Westpac) also witnessed a slight increase in its owner-occupied home loan book, which grew to $289.1 billion.
Interestingly, the bank’s investor loans ticked back up to $154.9 billion, after a slight fall to $154.8 billion the month prior.
Australia and New Zealand Banking Group Limited (ANZ) reported marginal lifts in both its owner-occupied home loans and investor loan book, reaching $183.3 billion and $92.7 billion, respectively.
Macquarie Bank, known for its rapid mortgage book growth since the onset of the COVID-19 pandemic, recorded an owner-occupied mortgage book of $60.3 billion and a slightly increased investment lending of $44.6 billion.
The growth in home lending observed in April followed a pause in the cash rate after the Reserve Bank of Australia (RBA) implemented 10 consecutive cash rate hikes, bringing the cash rate to 3.6 per cent.
As economic indicators such as house lending, building approvals, retail spending, and consumer and business confidence displayed signs of weakening, many economists anticipate the RBA to maintain the cash rate in June.
However, the latest monthly consumer price index (CPI) data for April, which reported a 6.8 per cent increase, has introduced the possibility of “upside risk” to interest rate expectations.
Largest banks survive APRA stress test
In other news, APRA conducted a stress test on Australia’s largest banks to evaluate their resilience during a major financial crisis amid ongoing market volatility.
The test, focusing on 10 “systemically important” Australian banks, found Australia’s largest banks would withstand a major financial crisis.
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