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").
Overall exposure to property
September data reflects the first contraction in residential
investor exposure since 2008.
Total exposure to all property grew by just over 2.0% for the
quarter and 8.7% for the year.
Growth in overall exposure was consistent with the June
quarter, albeit now equally driven by residential and commercial
Exposure to mainstream commercial asset classes increased
during the quarter, more than offsetting last quarter's
Office and retail property exposure hit new peaks this quarter,
with industrial exposure continuing to fluctuate just below
previous peak exposure.
Commercial exposure is now within 3.5% of the previous peak
exposure in March 2009.
Growth in exposure to subdivisional land slowed significantly
to 2.0%, from 9.2% for the June quarter. However, lending on other
residential developments expanded significantly, reflecting just
under 20% growth year-on-year.
Exposure to tourism property declined markedly (-8.4%).
Despite impairments reducing by $1.3 billion over the past 12
months, the proportion of impairments was stable at 0.6% of total
Specific provisioning for impairments remains historically high
(but decreasing) at approximately 33%.
The number of loans held and total exposure to the residential
sector continues to increase.
Recent measures to dampen growth in investor loans have started
to bite, with exposure contracting by -0.6%.
Year-on-year growth in investor loan exposure also dropped from
18.6% to 9.1% from the June to September quarters.
Exposure to owner-occupiers still dominates at 62% of overall
exposure, expanding slightly.
Change in property exposure by sector
Property exposure by lender group
Aggregate residential property exposure by
New residential loans approved per quarter by
Commercial property exposure by sector
Commercial property impairment
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This newsletter includes links to recent documents relating to superannuation, funds management & financial services.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).