Each quarter APRA publishes Property Exposure for ADI’s and at first blush it looks like useful data. However, it does not provide the right lens on the the data, so some critical dimensions are missing completely.
First, we get nothing at all about Loan to Income ratios, either at a portfolio or new written loan level, when this is regarded as an essential tool is assessing true risks.
Second, we need a split between the key characteristics of investment loans versus owner occupied loans. What share are interest only loans, and how does the LVR splits stand between the owner occupied and investment sector? How do loan sizes compare between the two types?
Third, DFA believes, in the interests of good disclosure, and also as part of macroprudential management, the data should be provided at the individual lender level. They already do this for the monthly banking statistics. We know that some banks are more exposed to investment lending (and potentially exceeding 10% growth), yet the whole situation is opaque.
It is really time for proper disclosure, rather than myopic slices of data (even if contained in multiple layered spreadsheets) which mask as much as they hide. Come on APRA, lets get to the true picture.
