The Reserve Bank of Australia (RBA) today released the private sector credit aggregates data for the month of April:
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (0.0% MoM; -0.4% QoQ; 0.5% YoY) and business credit growth (0.3% MoM; 0.9% QoQ; 2.7% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.6% MoM; 1.6% QoQ; 6.1% 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 has bounced back after decelerating in recent months:
A long-run breakdown of owner-occupied credit (0.5% MoM; 1.4% QoQ; 5.0% YoY) and investor credit (0.8% MoM; 2.1% QoQ; 8.2% 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:
Finally, the share of loans going to housing hit a record high 60.49% in April 2014, whereas loans to businesses hit an all-time low 33.23%:
Housing continues to kill Australia’s productive economy.
