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- Since APRA's lending restrictions in March 2017, the average portfolio has fallen from 39.5% to 27.9%.
- The shifting in behavior of the lightening standards, which has been cited as the main catalyst for Australia's housing downturn.
Westphalia Nab and ANZ presented earnings last week.
Interest-only loans have been a key area of focus, since APRA has been enforced in the last year.
About six months ago, Sydney and Melbourne started falling, and they have not stopped falling since.
It's coincidental with a big rough trot for the big banks, with the ASX200 Banks Index posting falls of more than 20% since May last year.
And in response to the tighter lending standards, the latest results show that a clear shift has taken place in the lending behavior of the major banks.
This is what the shift looks like:
* CBA has a June 30 year-end, so the CBA figures are effectively shown in the chart.
Westpac stands out, given that prior to APRA's restrictions to full 50% of its loan book was interest-only. It's now reduced that total by 30%.
Among the big four, ANZ has been the most aggressive in the share of its portfolio. Its 22% share represents a decline of 39% from March 2017 levels.
The currencies are reflective of the tighter credit conditions in Australia's housing market, which is cited as the main factor dragging on prices.
Each of the big banks are also subject to a limit of 30% of new loan flow.
The latest bank results show that they are also converting their loans from interest-only to principal & interest repayments.
Most interest-only loans have an initial term of five years. So given that interest-only in the beginning of the year, they are expected to be very important.
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