The Australian Prudential Regulation Authority ('APRA') has recently released its latest quarterly property exposure data for domestic and foreign Authorised Deposit-taking Institutions ('ADI's').
Insights...
Overall exposure to property
- Growth in overall exposure remained consistent at +/- 2.0% for the quarter.
- Growth in exposure to owner-occupiers out-paced growth in residential investment and commercial property loans.
Commercial sector
- Office and retail property exposure hit new peaks again this quarter.
- Industrial funding again contracted.
- Aggregate commercial exposure continues to expand beyond the previous peak in March 2009 (+2.9%).
- Growth in exposure to land subdivisions fell again to 3.1% vs 5.4% for the last quarter, with Y-on-Y growth still strong at 17.3%.
- Growth in exposure to Other Residential contracted (2.6% vs 4.0% for the preceding quarter. Y-on-Y growth is still strong at 17.2%.
- Exposure to tourism property contracted again (-6.9%).
- Impairments fell below $1.0 billion for the first time since the September 2007 quarter, albeit remaining stable against increased total exposure.
- Specific provisioning remained stable in dollar terms but increased as a % of the reduced impairments, to 40.5%.
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Residential sector
- The number of loans held and total exposure continues to increase.
- The RBA lowered the cash rate by 25 basis points to 1.50% in August 2016.
- Owner-occupier loans still dominate at 65% of overall residential exposure.
- Measures to dampen growth in investor loans have resulted in an overall contraction in exposure of -2.4% over the last four quarters.
Change in property exposure by sector
Property exposure by lender group
Aggregate residential property exposure by type
New residential loans approved per quarter by LVR
Commercial property exposure by sector
Commercial property impairment
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