Mortgage growth at lowest level in 35 years: RBA

Mortgage lending remains in the doldrums, managing only growth of only 0.5% in January to be up 5.3% over the past year, according to new credit figures released by the RBA. 

The 5.3% annual growth in mortgages is the lowest level since the RBA began keeping records in August 1977. 

Owner-occupier housing credit rose by 0.5% in January to stand 5.7% higher than a year ago (also the lowest since records were kept dating back to January 1991) while investor housing finance lifted 0.4% in January to be up 4.7% over the year (a three-year low). 

The latest figures show that the non-bank sector (including building societies and credit unions) continue to lose ground to the banking sector in mortgage lending despite their best efforts to encourage borrowers to consider switching to an alternative smaller lender. 

The cumulative non-bank mortgage book shrunk by $500 million over January, from $156.6 billion to $156.1 billion. 

In comparison, the banking sector increased its cumulative mortgage book by $4.1 billion fr0m $1.682 trillion to $1.686 trillion, with the major banks accounting for $1.361 trillion (81%). 

The RBA figures show that personal credit fell by 0.2% over the month to be down 1.3% over the year just, close to the biggest decline in over two years. 

Business credit also fell by 0.2% in January after a 0.3% rise in December. Business credit is 1.4% higher than a year ago.