Monthly Authorised Deposit Institution Statistics

Above are the Household Deposits, Owner Occupier and Investor Loan trends for June 2021. The chart above is flat and unexciting, because aggregate amounts of outstanding loans and savings don't tend to move by huge percentages in a single month. There are significant developments if we look closer though. So, the following charts, at the risk of misleadingly accentuating the changes, restrict the Y axis to zoom in and examine the detail.

In June, the trend of owner occupier mortgages growing faster than household deposits continued. We can see that clearly in the chart above. This comes as the gap between mortgages and deposits closed dramatically during most of the pandemic period. In February 2020, the gap stood at $118B. At its lowest in October 2020, the gap had closed to about $48.5B. As it stands in June, the gap is back to $82B. Still well below the pre-pandemic levels, but indicating a significant moderation in household savings and a particularly fast pace of owner occupier credit growth over the last month. This trend could reverse sharply in July as households in locked down Sydney revert to the non-spending mode, and consumer confidence generally is dented by the outbreaks. Counteracting that would be any falls in income, although they will be at least partially offset by government assistance. This combines with growth in lending inevitably also slowing in the next few months because of lower transaction volumes during the lockdowns. The exact timing of that slowdown is hard to pinpoint because of delays between sales and bank approvals, but it should start to show up by August's figures released at the end of September.Finally, investor loans (above) have risen again in June. At around 0.4% for the month, or 4.8% annualised, this is the fastest pace of investor loan balance growth in a few years, though it's coming off a very low base. It also pales in comparison to the owner occupier loan growth for the month, at 1.1%, or 12.1% annualised.

The Lending Indicators post from last month and in particular the Investor Ratio chart illustrate just how low - by historical standards - investor lending has been in the recent years.

We'll keep an eye on ABS's Lending Indicators next week to for an update to the investor ratio, and possibly a check in on the state of first home buyer activity.