The June 2016 Credit Aggregates from the RBA, released today, shows that total lending for housing rose $6.6 billion or 0.42% in the month, making an annual rate of 6.7%, compared with 7.3% a year ago. Total loans outstanding for housing were $1,569 billion, another record.
Loans for investment housing rose by 0.1% or $0.6 billion, whilst lending for owner occupation rose 0.6% or $6.1 billion. Again we saw considerable shifts between owner occupied and investment loans in the month due to re-classifications, so there is still noise in the data. That said 35.1% of all housing loans are for investment purposes, down from 35.3% last month.
Business lending fell by 0.11% seasonally adjusted, or $0.9 billion, giving an annual growth rate of 6.6%, up from 4.4% last year. However, the proportion of lending for business fell again to 33.2% of all loans, a worrying continued falling trend. Personal credit also fell a little.
Still we see more lending for housing rather than to business. Not good news for the economic outlook.
The RBA notes
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 $42 billion over the period of July 2015 to June 2016 of which $1.3 billion occurred in June. 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.
