Mortgage Lending Slows as Tax Reforms Bite

The latest APRA data shows that mortgage lending across Australia's biggest banks is slowing down. This trend is attributed to two main factors: Labor's Budget reforms, which have reshaped what investors can claim on established property, and the Reserve Bank of Australia's tightening of borrowing costs.

The combined owner-occupier growth has held at just over 6.5%, while investor growth has slipped below 9% for the first time in several months. The slowdown was not spread evenly among the banks, with NAB recording the sharpest pull-back on both its owner-occupier and investor books.

CBA and Westpac's results were more mixed, as their owner-occupier books actually picked up slightly while their investor books cooled. ANZ bucked the trend on the investor side, with growth accelerating even as its owner-occupier lending remained the slowest-growing in the dataset.

Macquarie Bank continues to stand out from its major bank rivals, with both its owner-occupier and investor books expanding several times faster despite a slight easing of pace month-on-month. The gap between Macquarie's growth and that of its competitors suggests it is taking an outsized share of new mortgage flow relative to its size in the market.