Australian housing credit still rising, led by investors: ANZ
GUEST OBSERVER
Total private credit posted another solid result in September, led by expansion in the housing sector. Of note is the pickup in investor credit, where growth has been accelerating over the past six months.
Combined with strength in other indicators, this suggests the housing market remains in good shape.
Housing credit expanded a steady 0.5 percent m/m in September, in line with the trend so far this year. Investor credit rose a solid 0.6% reflecting the recent strength in investor finance approvals after last year’s regulatory-induced slowdown.
This is the strongest growth for the segment since August 2015, and provides further evidence (along with the recent pickup in house prices and auction results) that sentiment in the housing market remains positive.
Business credit posted a mild increase in September, but growth continues to slow. This is in line with the ongoing slowdown in new finance approvals (Figure 2), and is likely to remain the case in coming months. Meanwhile, personal credit contracted for the 10th month in succession, and now sits 1.3 percent lower than a year ago.
Although consumer confidence sits at elevated levels and household consumption is still ticking along, individuals appear cautious of taking on new (non-housing related) debt.
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted here.
Daniel Gradwell is economist, ANZ and can be contacted here.