The Reserve Bank of Australia (RBA) has released private sector credit aggregates data for the month of June:
Total credit provided to the private sector by financial intermediaries grew by 0.4 per cent over June 2013 after increasing by 0.3 per cent over May. Over the year to June, total credit rose by 3.1 per cent.
Housing credit increased by 0.4 per cent over June following an increase of 0.4 per cent over May. Over the year to June, housing credit rose by 4.6 per cent.
Other personal credit increased by 0.2 per cent over June after decreasing by 0.1 per cent over May. Over the year to June, other personal credit increased by 0.2 per cent.
Business credit rose by 0.5 per cent over June after increasing by 0.2 per cent over May. Over the year to June, business credit rose by 0.9 per cent.
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (0.2% MoM; -0.1% QoQ; 0.2% YoY), business credit growth (0.5% MoM; 0.9% QoQ; 0.9% YoY) and housing credit growth (0.4% MoM; 1.2% QoQ; 4.6% YoY) remain positive in annual terms, but are at subdued levels relative to their long-run average growth rates.
Focusing on the housing market, annual credit growth continues to recover from its all time (36-year) low of 4.40% achieved in March. The below chart shows growth on a quarterly basis, which also shows a slow recovery:
Finally, a breakdown of owner-occupied credit (0.3% MoM; 1.0% QoQ; 4.1% YoY) and investor credit (0.6% MoM; 1.6% QoQ; 5.7% YoY) is provided below:
Once again, much of the current mortgage demand is being driven by investors, which has also been reflected in recent housing finance data from the Australian Bureau of Statistics.