The Reserve Bank of Australia (RBA) today released credit aggregates data for the month of April, which revealed a continuation of the soft credit conditions prevalent over the past year. According to the RBA:
Total credit provided to the private sector by financial intermediaries rose by 0.4 per cent over April 2012, after rising by 0.5 per cent over March. Over the year to March, total credit rose by 3.8 per cent.
Housing credit increased by 0.4 per cent over April, following an increase of 0.4 per cent over March. Over the year to April, housing credit rose by 5.3 per cent.
Other personal credit decreased by 0.3 per cent over April, after increasing by 0.1 per cent over March. Over the year to April, other personal credit decreased by 1.8 per cent.
Business credit increased by 0.7 per cent over April, after growing by 0.7 per cent over March. Over the year to April, business credit increased by 2.3 per cent.
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (-0.3% MoM; +0.1% QoQ; -1.8% YoY) fell in April and remains lower over the year. By contrast, business credit (0.7% MoM; +1.8% QoQ; +2.3% YoY) and housing credit (+0.4% MoM; 1.2% QoQ; 5.3% YoY) grew over the year, but at subdued levels relative to their long-run average growth rates.
Focusing on the housing market, annual credit growth hit a fresh all time (35-year) low of 5.27%. However, the below chart, showing monthly housing credit growth on a 3-month moving average basis (3MMA), suggests that housing credit growth has levelled-out after trending down since March 2010:
Overall, it’s another weak data set that supports a continuation of the ‘slow melt’ in Australian house prices.
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