The RBA Credit Aggregates for December, released today, shows a continued rise in lending for housing, up 0.7% in the past month seasonally adjusted by $10.6 bn to $1.52 trillion. This includes all lending, including non-banks, seasonally adjusted. There are no reported series breaks this past month, so no abnormal shifts between investment and owner occupied loans . This is a rise of 7.1% over the past year.
The splits between owner occupied and investment lending shows that loans for owner occupation rose $10 bn, up 1.1%, to $967.7 billion. Loans for investment purposes also rose – just 0.09% or $0.49 billion to $546 billion, so investors are still in the market. The proportion of loans on book relating to investment lending has fallen again, to 36.1% from a high of 38.6% last year. This is still a big number, and higher that the levels which were thought to be a concern (as expressed by the regulators) last year, before recent swapping between categories. Remember the Bank of England is worried by their 16% share of investment loans – in Australia it is much higher!
Personal credit has fallen again, down 0.2% to $148 billion. But lending for business was only up 0.11%, or $0.94 billion to $826 billion. This represents a low 33.2% of all lending, down from 33.3% last month, and down from 34.7% in 2012. This continues to highlight the lack of investment in the grown engine of the economy – business – as compared to the easy money going towards housing. Structurally, we continue to have a problem, as housing growth is not productive and cannot lead to the right economic outcomes. Remember this is with interest rates at rock bottom.
We will review the APRA ADI data later.
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