The Reserve Bank of Australia (RBA) has released the private sector credit aggregates data for the month of October:
Total credit provided to the private sector by financial intermediaries grew by 0.3 per cent over October 2013 after increasing by 0.3 per cent over September. Over the year to October, total credit rose by 3.5 per cent.
Housing credit increased by 0.5 per cent over October following an increase of 0.5 per cent over September. Over the year to October, housing credit rose by 5.0 per cent.
Other personal credit decreased by 0.1 per cent over October after increasing by 0.3 per cent over September. Over the year to October, other personal credit increased by 0.6 per cent.
Business credit increased by 0.1 per cent over October after decreasing by 0.1 per cent over September. Over the year to October, business credit rose by 1.4 per cent.
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (-0.1% MoM; -0.4% QoQ; 0.6% YoY) and business credit growth (0.1% MoM; 0.2% QoQ; 1.4% YoY) remain highly subdued, whereas housing credit growth (0.5% MoM; 1.4% QoQ; 5.0% YoY) is picking-up, albeit from subdued levels.
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:
Finally, a breakdown of owner-occupied credit (0.40% MoM; 1.17% QoQ; 4.33% YoY) and investor credit (0.65% MoM; 1.83% QoQ; 6.39% 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.
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