Business credit is clearly slowing now (0.2% m/m, 3.4% y/y, lowest since Jun-18), amid ongoing tight credit to small business. Meanwhile, personal credit continues to contract sharply (-0.2% & -3.4% y/y), the ~worst since the GFC, and a negative signal for retail sales. Housing slid to a fresh record low (0.2%, 3.1% y/y) – with investors contracting m/m (-0.1%, 0.1% y/y); & owner-occupiers (0.3%, 4.7%) also at a 5-year low.
This is the key to getting any economic multipliers out of the renewed property bubble. If apartment oversupply and the defect crisis aren’t resolved then construction will not follow and it will be an empty caloric property price lift that runs out of steam with no economy to support it.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
