Friday, 24 January 2020

The Australian Prudential Regulation Authority ('APRA') recently released its latest quarterly property exposure data for domestic and foreign Authorised Deposit-taking Institutions ('ADI's').

The Property exposures update - September quarter 2019 provides a snapshot of APRA's quarterly property exposures data on commercial and residential sectors.

Key insights

Recovery in the ADIs’ exposure to commercial property (‘All Commercial’) following minor contraction in the previous quarter. The increase was led by a healthy rise in ADIs’ exposure to the retail sector over the quarter,
despite ongoing industry headwinds.


A return to growth in ‘All Commercial’ property exposure

Aggregate commercial property exposure increased by 0.7% following a contraction of 0.2% in the June 2019 quarter, representing the first negative quarter-on-quarter exposure growth since December 2016. The resumption of growth in All Commercial property exposure was largely driven by a healthy rise in exposure to Retail property (3.4%) despite ongoing weak consumer spending reports, and Tourism and Leisure sector (3.0%).

Retail fastest growing sector

We have continued to monitor the APRA Retail sector data for signs of a contrarian trend to the broader challenges facing the Retail industry. Interestingly, ADIs’ exposure to the sector increased by a robust 3.5% following a mild 0.9% contraction in the June 2019 quarter. Annual exposure growth in the Retail sector remains robust, increasing by 7.2% in the year to September 2019, after 8.5% growth in the year to June 2019.

Residential sector data excluded from report

On 20 September 2019, APRA released proposed changes to refresh its authorised deposit-taking institution (ADI) statistical publications, following the introduction of the new Economic and Financial Statistics (EFS) data collection. The changes will incorporate more detailed data on residential property exposures and new housing loan approvals. As a result of the proposed changes, residential property exposures have not been incorporated into the September 2019 publication. Updated statistics are expected to be released by APRA in March 2020.


 To read the full Property exposures update click Download PDF below

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