No interest rate bounce as mortgage lending up just 0.3% in June
Interest rate cuts in May and June have failed to translate into a rise in mortgage lending, according to private credit data released by the RBA today, with mortgage growth still at record lows.
Housing credit increased by 0.3% over June, following an increase of 0.3% over May – despite 75 basis points being cut from the cash rate over the two months (50 basis points in May and 25 basis points in June) taking the cash rate from 4.25% to 3.5%.
Loans to owner occupiers grew by just 0.2% over June - the smallest increase in lending to this sector for RBA records going back to 1990 while investor mortgage growth was higher at 0.5% for the month.
Over the year to June, housing credit rose by 5.1% - the lowest annualised rate of growth dating back to 1977.
Total credit provided to the private sector by financial intermediaries rose by 0.3% over June 2012, after rising by 0.5% over May. Over the year to June, total credit rose by 4.4%.
The June reading was below the median of 0.4% growth forecast by economists polled by Bloomberg last week.
Other personal credit decreased by 0.2% over June, after increasing by 0.1% over May. Over the year to June, other personal credit decreased by 1.5%.
Business credit increased by 0.5% over June, after growing by 0.8% over May. Over the year to June, business credit increased by 4.4%.
