Australian Mortgage Approvals Drop Strongly

Australian home-loan approvals fell in May by the most in more than five years as the country’s banks tighten lending criteria.

The number of mortgages approved for owners that occupy their home fell 6.1 percent in May from April, the largest drop since December 2009, according to government data released Friday. In New South Wales, which counts Sydney as its capital, such approvals fell 5.9%, the most since February 2012.

Lenders have tightened mortgage standards after a 43 percent surge in home values in Sydney since May 2012 fueled concerns of a property bubble. Banks have removed interest-rate discounts on home loans to investors and this week cut the loan-to-value ratio for landlords.