The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of August 2018:
A chart showing the long-run breakdown in the components is provided below:
Personal credit growth (-0.2% MoM; -0.3% QoQ; -1.4% YoY) is still in the gutter, whereas business credit growth (0.8% MoM; 1.6% QoQ; 3.8% YoY) and housing credit growth (0.4% MoM; 1.3% QoQ; 5.4% YoY) are stronger.
A long-run breakdown of owner-occupied credit (0.53% MoM; 1.66% QoQ; 7.46% YoY) and investor credit (0.08% MoM; 0.09% QoQ; 1.47% YoY) is provided below:
Annual investor credit growth has tanked to an all-time low, whereas owner-occupied credit is also weakening. Combined, overall housing credit growth is trending down:
The below chart shows that quarterly housing credit growth remains weak, but has at least stabilised:
Driven by a tiny rebound in quarterly investor mortgages, which continues to hover near zero:
The annual dollar value of housing credit issued rebounded marginally, but remains down to $19 billion (-17%) since peaking in August 2017:
Finally, the share of loans going to housing was 62.22% in August – fractionally below all-time highs. By contrast, the share of total loans to businesses was just 32.55% – fractionally above all-time lows:
Overall, housing credit growth is weak, driven by a desertion of investors, which is reflected by the fall in house prices.
