Official housing loan approvals in February 2019 continued the retreat seen since February 2018 for both owner occupiers (down -14.1% on last Feb) and investment loans (down -28.8% on last Feb). The fall in investor loans has been the largest seen since April 2016, however the official figures ignore the large non-bank segment of the market which has picked up substantially over the past 18 months. ANZ Bank data from 2018 showed that new mortgage issuance by non-bank lenders had risen by approximately 13 per cent over the year in the 2017–18 financial year, taking the non-banks’ share of total housing debt from 6.6 per cent to 7.7 per cent. Total lending from banks for the month of February rose 3.1% from January 2019 (typically a quiet month) but remains down a staggering -18.6% lower than February 2018. There has been some slowing in the rate of decline for Owner Occupiers however Investor lending continues to decline at an increasing pace. The moves by APRA to relax the credit controls on banks and the announcement by some banks to implement loser conditions for investment lending has not yet had any impact on lending numbers. The more significant impact on lending for investors now is the prospect of further falls in values and the uncertainty with the Federal Government tax policies. The rise of non-bank lenders also caught the eye of the regulators late last year with APRA now having the ability to invoke a reserve power to impose regulations on non-bank lenders should any systemic risks to stability be identified. However, the RBA said that it believes non-bank lending is “unlikely to lead to systemic risks at its current level”. The prospect of run away credit from non bank lending in the current market is highly unlikely therefore any intervention by APRA will also be unlikely.