Housing debt passed $1.5 trillion in May despite a slowdown in lending to investors.

It seems like only yesterday that Australia’s housing debt was a trifling $500 billion but it was actually 13 years ago.

Since then, it’s risen by another trillion, reaching $1.564 trillion in May according to Reserve Bank data on Thursday.

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The 0.4 per cent rise between April and May added the latest $10 billion.

But in the wake of a bout of finger-wagging by the banking regulator in late 2015, growth in lending to investors – the component closely watched by the RBA – has slowed.

At $552 billion in May, it was up by six per cent from a year earlier, barely half the 11 per cent growth rate over the year before that.

The line in the sand drawn by the Australian Prudential Regulation Authority in December 2014, amid fear of an investor-driven housing price bubble, was 10 per cent annual growth in investor housing loans.

The current growth rate is well below that.

But the slowdown in lending to investors has been neatly offset by a pickup in lending to people intending to live in the home they’re buying.

Debt owed by owner-occupiers, now $1.012 trillion, is up by seven per cent from a year ago, ramping up the previous year’s growth rate of five per cent.

As a result, annual growth in total housing debt came in at seven per cent in May, virtually the same as the rise over the previous year.

– AAP