Credit aggregates still stalled

Going nowhere fast, from the RBA:

All growth rates for the financial aggregates are seasonally adjusted, and adjusted for the effects of breaks in the series as recorded in the notes to the tables listed below. Data for the levels of financial aggregates are not adjusted for series breaks, and growth rates should not be calculated from data on the levels of credit. Historical levels and growth rates for the financial aggregates have been revised owing to the resubmission of data by some financial intermediaries, the re-estimation of seasonal factors and the incorporation of securitisation data. The RBA credit aggregates measure credit provided by financial institutions operating domestically. They do not capture cross-border or non-intermediated lending.

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  1. Stalled will be understatement of the year next year as we now enter “The Great Australian Property Crash”
    There is no way out of this and that’s it,
    2020 will go down in the record books as the Great Australian Dream turns into The Great Australian Nightmare

    • Goldstandard1MEMBER

      I’ll believe it when it happens. The evidence says it could, should and will happen starting Feb/March 2020, but the can keeps getting kicked down the road.
      My position is this, it will happen eventually and even if that is in 2 years, that is not long enough to justify taking on high levels of debt for record illogically high house prices in this country. When it goes, it will go fast, faster than the rises we’ve seen since May 2019.
      Some others seem to think that it hasn’t happened yet, it won’t happen. They have no idea and have never seen economic hardship for a long time if ever. It’s quick, ugly and inevitable.

      • Gold
        We are here mate, the fat lady has sung!
        Only Aussie’s 50+ know what a recession is and when prices fall
        The problem is that even when prices fall 50% buying property will still be unaffordable, people won’t have jobs and banks will be even tougher
        It’s going to be very brutal and very sad
        This could have been avoided
        MB has been screaming from the roof since 2012

        • The problem is that even when prices fall 50% buying property will still be unaffordable, people won’t have jobs and banks will be even tougher

          Here is a mathematical problem for you:

          There are 2 million houses
          There are 3 million families requiring a house
          The median house price is currently $1 million which is unaffordable to 1 million families.

          By what percentage do prices have to fall to enable every family to buy a house to live in?

          • At the start of the cycle when you could buy homes at 2 or 3 times income and the economy was in the early stages of the long cycle as interest rates kept falling over time house prices started to lose affordability
            We have to see but as the falls happen it may be that prices seem more affordable but it’ll be very hard to get finance and also many won’t have a job even if prices are half
            Probably the haves will find it much more affordable
            The middle and lower maybe never
            It’ll be very interesting to observe
            Let’s see how it plays out, you don’t have to wait any longer
            We are now at the very start of the multi year decline

        • I think you are still ignoring the policy lever realities. There are at least 2 rate cuts left and the QE backstop after that. Under those conditions there is simply no way in hell property prices will do anything but inflate further. Whilst continued bubble blowing is no way to manage an economy, when that’s the only trick u have u can bet it will be played until it’s exhaustion, which could be many years down the track still.

      • Professor DemographyMEMBER

        Can will be carefully aimed at and booted again. Guaranteed. I concede it can’t be done forever but there is only one way to find the limit.

        • People here having been calling the crash since 2012. Maybe in another 7 years it might come to fruition…

          • Yes true but the crash only comes when everyone thinks prices will rise further and or throw the towel in
            We are at that point
            Enjoy house price bbq’s this summer it’ll be the last

        • Agree because a massive property bust will terminate every government in the country. I would expect every lever to be pulled to avoid that outcome.

  2. The RBAs personal credit statistics are becoming less relevant each month. Growth rates and transaction volumes of Buy Now Pay Later services is such that they now have a structural impact on the personal credit growth values.

    Credit card users that previously paid one card off with another and then rolled the lot into a personal loan can now sacrifice future cash flows instead. Debt does not matter – but matching the expected cash flows, or debt serviceability does. This is the same argument cited by CJoye used to justify higher household debt to income ratios by expressing it as debt serviceability.

    Would be disappointing if the RBA failed to realise that this stat was flawed (structurally underestimates) and uses it to justify QE policy. Even more infuriating if those same BNPL companies are eligible to access QE loans.

    Otherwise interested to see how BNPL providers go over Christmas and New Year period, especially if they can capture slightly larger priced items like airfares.