The Reserve Bank of Australia (RBA) today released the private sector credit aggregates data for the month of March:
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (-0.1% MoM; -0.3% QoQ; 0.4% YoY) and business credit growth (0.2% MoM; 0.9% QoQ; 2.6% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.5% MoM; 1.6% QoQ; 5.9% YoY) is stronger, although is remains at fairly subdued levels relative to its long-run average growth rate.
The below chart shows that housing credit growth is clearly slowing after accelerating in the middle of last year:
A long-run breakdown of owner-occupied credit (0.4% MoM; 1.3% QoQ; 4.9% YoY) and investor credit (0.7% MoM; 2.1% QoQ; 7.9% YoY) is provided below:
Clearly, much of the current mortgage demand continues to be driven by investors, which has also been reflected in recent housing finance data from the Australian Bureau of Statistics:
That said, both components are now slowing, with the quarterly growth rate falling:
Finally, the share of loans going to housing hit a record high 60.34% in March 2014, whereas loans to businesses hit an all-time low 33.36%:
No wonder housing is killing Australia’s productive economy.