Loans to property investors across Australia kept on rising in July, according to figures released on Monday, despite banks starting to try to discourage landlords.

The Australian Prudential Regulation Authority (APRA) monthly banking statistics show that $539.5 billion worth of loans to property investors were on the books in July 2015, a jump of 11.4 per cent since July 2014.

Experts such as AMP Capital chief economist Shane Oliver were expecting the start of a slowdown in the figures.

Dr Oliver said APRA had indicated was planning to tighten the rules for investors in the months leading up to July, though he pointed out higher interest rates for those buyers weren’t introduced until that month and there is a lag effect on the data.

‘APRA is determined to see investor lending slow,’ Dr Oliver said.

‘APRA’s measures didn’t get aggressive until July – there will be more to come,’ he said.

In late-July AMP Bank put lending to investors on hold and increased interest rates for existing landlords.

APRA introduced a 10 per cent annual growth limit on bank loans to property investors in December 2014.

In June 2015, investor loan exposures of banks were recorded at 19 per cent higher than June 2014. In the same period, loans to owner occupiers grew 2.5 per cent. spokeswoman Michelle Hutchison said out of 30 banks monitored by APRA, 26 had increased their investment lending over the year to July.

‘While APRA has implemented measures to curb investment lending growth, many banks have clearly not responded as their lending has continued to rise,’ Ms Hutchison said.

‘For borrowers, it means that some lenders will do more to try and curb their lending growth by making it more difficult to secure an investment loan by tightening their lending criteria, increasing their investment home loan rates or cease lending to investors for a period of time.’

However, Domain Group senior economist Andrew Wilson was not surprised that investor numbers were yet to be reined in.

‘The trend is clearly upwards and we’re becoming a nation of residential investors,’ Dr Wilson said.

‘I don’t think [APRA measures] are going to deter a growing trend for higher rather than lower investment.’

July 2014

$781.2 billion – owner occupied

$484.2 billion – investor loans

June 2015

$824.1 billion – owner occupied

$536.7 billion – investor loans

July 2015

$827.7 billion – owner occupied

$539.5 billion – investor loans

Source: APRA

Posted by Jennifer Duke – Domain (Fairfax) on 4th September, 2015