Monthly Authorised Deposit Institution Statistics - October 2021

Household savings growth slowed as NSW and Victoria relaxed restrictions in October.

Owner Occupier housing loans total continued to grow, now showing a year on year change of about 8.9%.

The pause in investor lending didn't eventuate, with, perhaps, slow processing times for applications effectively smoothing the differences in sales volumes.

Meanwhile, investor loans continued tick up off their low base. They are now up 2.35% year on year. This is a conundrum for APRA, since measures to curb credit growth, to be effective, will need to focus on owner occupiers. Despite the housing price boom throughout the country, investors are not loading up on debt. In real terms, the stock of investor debt is down year on year.

On the other hand, the best policy may be to simply let the already apparent cooling do the job for APRA. There are a couple of months of credit growth baked in at this stage, with October and November seeing record or near record number of sales. If, as is typical, a cooling market translates into lower numbers of sales, then credit growth will naturally slow early next year - with a lag to allow for the time delay between sales and settlements.