The RBA has released their credit aggregates to end November 2016. Total credit for housing has now risen to $1.607 trillion, seasonally adjusted, up 0.5% in the month and 6.3% in the past year. Within that, investment lending was 35% of the total, up 0.68% whilst owner occupied loans rose 0.4%. So we see investment lending continuing to regain momentum and total credit growth is still running ahead of inflation and wages – so expect the household borrowing ratio to continue to climb.
Business lending was up 0.5% in the month, or 4.9% in the year, whilst personal credit continued to fall (ahead of Christmas) down 1.2% in the year to end November.
We see that share of investment mortgages on the rise, whilst the proportion of lending to business, to the total continues to fall.
There is still noise in the data. The RBA says:
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. 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.
Following the introduction of an interest rate differential between housing loans to investors and owner-occupiers in mid-2015, a number of borrowers have changed the purpose of their existing loan; the net value of switching of loan purpose from investor to owner-occupier is estimated to have been $47 billion over the period of July 2015 to November 2016, of which $0.9 billion occurred in November 2016. These changes are reflected in the level of owner-occupier and investor credit outstanding. However, growth rates for these series have been adjusted to remove the effect of loan purpose changes.
One thought on “Housing Credit Jumps Again”