Loan approvals fall across the board

The sharpest reported drop was for lease finance approvals, which fell by 2 per cent month-on-month, followed by personal finance approvals (1.7 per cent), housing finance approvals (1.4 per cent) and commercial finance approvals (0.2 per cent).

The declines have been reported against a backdrop of tighter lending conditions and subdued property market activity.

Several lenders have noted that compliance with responsible lending obligations prompted their decisions to review and amend their credit policies.

Most recently, West Australia-based lender KeyStart Home Loans introduced measures that would require loan assessors, including mortgage brokers, to provide more detailed commentary regarding an aspiring borrower’s living expenses.

The extent of the slowdown in property market conditions has been highlighted by the latest data from the Australian Bureau of Statistics, which has reported a 2.5 per cent fall in the value of home loan approvals in November 2018, in seasonally adjusted terms, with housing approvals also falling, plunging 32.8 per cent in the year to 30 November 2018.

Figures provided by property research firm CoreLogic have also revealed that national dwelling values have slumped by 4.8 per cent nationwide, driven by a 6.1 per cent drop across Australia’s capital cities, led by an 8.9 per cent fall in Sydney and a 7 per cent decline in Melbourne

[Related: Lender cuts buffer rate, tightens expense checks]