Attempts to encourage greater first home loan activity seem to be working, as the Australian Bureau of Statistics (ABS) reveals its latest lending data. The group revealed that in June this year, the value of loans granted to owner occupiers increased 5.5 per cent from May levels in seasonally adjusted terms.

These results emerged as investment home loans marked a decline of 0.7 per cent over the same period. As a result, lending for total dwellings was down 2.8 per cent.

Commenting on the data, Executive Director of Residential at the Property Council of Australia Nick Proud said the figures point to strengthening in the owner occupier market. However, he warned that the effects of reducing investor activity could leave a negative impression on the real estate sector.

“What brings developments to market is a good mix of investors and owner occupiers who can ensure that pre-sale commitments are met and projects go from planning to construction,” noted Mr Proud.

“Keeping a strong pipeline of new housing supply for owner occupiers and renters alike is essential to take pressure of prices,.” he said.

The Housing Industry Association (HIA) issued a similar warning, saying that APRA’s intervention could affect not only investor lending, but also owner occupiers’ access to home loans. Senior Economist Shane Garrett emphasised that access to finance has an impact on new home building, as well as the economy as a whole.

HIA analysis of the ABS data showed that New South Wales witnessed the greatest increase in loan approvals over the past year, followed by South Australia and the ACT. At the other end of the spectrum was the remainder of the states, all of which have witnessed a contraction in home loan approvals.

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