New data indicates growth in home loans is slowing just as regulators move to crack down on risky lending practices.
Bureau of Statistics figures released this morning show the value of new mortgages approved grew by 1 per cent in October to $29.2 billion.
The rise was uniform for both for owner-occupiers and investors, the category that has caused most concerns for the Reserve Bank.
Investment loans have been growing strongly for more than a year, with annual growth still at nearly 20 per cent despite today's slowdown.
The number, rather than value, of owner-occupier loans grew by a more modest 0.3 per cent in October.
The figures were released less than a day after the corporate and banking regulators, ASIC and APRA, announced new steps to encourage responsible lending practices.
APRA has written to banks to warn it will closely monitor any issuer where growth in investment home loans exceeds 10 per cent a year.
It has also suggested a minimum interest rate buffer of 2 per cent to ensure mortgage holders can afford their repayments when rates begin to rise.
ASIC has advised it is focussing on responsible lending obligations, particularly for interest-only mortgages issued to owner-occupiers.
Concerns have been raised about the timing of the crackdown, with fears it will amplify the slowdown in loan growth.
But JP Morgan senior economist Ben Jarman said the actions from APRA and ASIC are unlikely to have too much of an impact.
"I don't think the timing's necessarily wrong. In fact these are things that you want to have in place," he said.
"The parameters are not so tight that you think this is going to create huge problems for the market, but it does just kind of reinforce this slowdown that's probably underway already."
He said the slowdown also removes a potential barrier to further rate cuts from the Reserve Bank next year, a move that is now being predicted by a growing number of economists.
"We don't think that there's anything particularly disastrous on the cards here, but it's just a moderation from some very strong growth rates last year and that implies the RBA could have a bit more flexibility on monetary policy next year if the economy were to worsen further," Mr Jarman argued.
Today's ABS data also continued another trend, with the proportion of first home buyers falling to a fresh record low of 11.6 per cent of owner-occupier loans.