Housing credit growth slows

Pete WargentApril 3, 20170 min read


Won't spend too much time on this, as the Financial Aggregates figures relate to before APRA's latest round of changes and therefore the landscape has once again shifted. 
The Reserve Bank's latest figures showed credit growth of 0.3 percent in February, following on from a result of just 0.2 percent in January. 
Housing credit increased by 0.6 percent in the month, but both business and personal credit growth were negative.
Over the year to February housing credit increased by 6.4 percent down from 7.3 percent a year ago, with investor credit rising a notch further to 6.7 percent. 
Annual credit growth slowed to 5 percent from 6.6 percent a year ago.

Business credit growth in particular has slowed from 6.5 percent a year ago to just 3.7 percent.
There are many ways to fund business expansion,of course, but this doesn't necessarily bode well for the business investment outlook. 

As a result, housing now accounts for a record 61.7 percent of outstanding credit.
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There was a further $1 billion of housing loan purpose switching taking the total switched to owner-occupier from investor loans since July 2015 to $50 billion. 

And housing credit outstanding increased to $1.65 trillion by February 2017.

More measures have since been taken to slow the creation of new interest-only loans.

PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His latest book is Four Green Houses and a Red Hotel.

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.
Housing Credit
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