Lending for Australian housing fell for a third straight month in April, in the latest sign that a push by the banking regulator earlier this year to cool off the property market is beginning to work.
The number of Australian home-loan approvals fell a seasonally adjusted 1.9% in April from March, the Bureau of Statistics said Friday.
Continue Reading Below
Economists surveyed ahead of the announcement had expected a 1% decline over the month.
The value of loans for investment housing fell 2.3% from March, the ABS said.
The mortgage market is under close scrutiny in amid concerns that record household debt could eventually slow economic growth and destabilize banks.
In late March, Australia's banking watchdog ordered banks to toughen lending practices to investors in residential property, as it worries about risks including rising household indebtedness.
The Australian Prudential Regulation Authority told banks to limit the flow of interest-only lending to 30% of new residential mortgage loans. Banks must also keep lending to investors well below a benchmark of 10% growth, APRA said.
Reserve Bank of Australia Governor Philip Lowe has indicated that the central bank remains reluctant to lower interest rates further to avoid stoking the overheated market.
First quarter GDP data on Wednesday showed the economy growing at its slowest pace since 2009, with economists saying a slowdown in consumer spending is putting a brake on the economy.
A combination of record household debt, record low wages growth, soaring house prices, and a soft job market is expected to continue restraining consumer demand, according to economists.
-Write to James Glynn at firstname.lastname@example.org
(END) Dow Jones Newswires
June 08, 2017 21:48 ET (01:48 GMT)