Finance approved for residential investment in Australia has experienced another sharp increase in   June, according to new data from the Australian Bureau of Statistics.
The value of investment loans soared to $15.3 billion over the month, setting a new record following the previous high in   May 2015. 
The   June result was a 5 per cent jump from   May, with investor finance 24.8 per cent higher over the 2014-15 financial year compared with 2013-14. 
Meanwhile, the value of loans approved to investors over the first six months of this year is now 27 per cent higher than the amount approved over the first six months of last year.  
The loan market share for investors stood at 54.1 per cent over   June, just below the all-time record of 54.2 per cent in   May.
Banks have recently moved to increase lending rates to investors, for both existing and new loans, at the direction of the regulatory body, APRA. Increased mortgage rates for investor loans are designed to quell demand in this strong market sector.  
Although it is early days in this policy shift, there is no sign of any easing in the runaway train that is Australia's residential investment market. 
It remains unlikely the recent increase in rates will cause a significant decline in activity, particularly in the still-strong Sydney and Melbourne housing markets because yields are relatively high, there are prospects of continued capital growth and there are taxation advantages and investment benefits that residential investors enjoy. 
Moreover, a fall in residential investment would certainly not be welcomed by the majority of capital city markets that continue to report modest housing market activity and associated economic benefits.
Dr Andrew Wilson is senior economist for the Domain Group
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