Investor lending continues to cool down under

The ABS has released figures suggesting that investor lending in Australia's housing market has passed its peak, with lending activity among owner occupiers showing only marginal growth in October.

"Lending to investors declined for a sixth consecutive month in October, this time by 6.1 per cent to be worth $11.5 billion," says HIA economist Diwa Hopkins.

The value of lending to investors in the established housing market declined by 8.7 per cent in the month of October, while the value of lending to investors in the new housing market jumped by 50.6 per cent, following declines in the order of 20 per cent in both August and September.

"The monthly decline was driven by investors in the established housing market. In contrast, lending to investors in new housing partially recovered previous monthly falls, although the latest level is still below previous peak," adds Hopkins.

"Lending activity among owner occupiers remained strong in October, although with mortgage interest rate hikes having taken effect in November, we could see this situation change in the months ahead."

While interest rates remain low, the second half of 2015 has seen credit conditions become tighter, notes the group.