The RBA released their November Credit Aggregates. Total housing loans (SA) reached $1.51 trillion up 0.7%, thanks to growth of 1.05% in owner occupied loans, whilst loans for investment property grew by just 0.09%. Total owner occupied loans totalled $968 billion, and investment loans $548 billion, so investment loans now comprise 36.1% of all loans on book (from a high of 38.6% in July). We need to be a little cautious, as further adjustments were made in the classifications. The RBA tell us that “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 $32.5 billion over the period of July 2015 to November 2015 of which $1.9 billion occurred in November. These changes are reflected in the level of owner-occupier and investor credit outstanding”.
Of note is the relative movement in business lending, which was 33.2% of all loans, to $826 billion, up 0.11% in the month. Business lending is still restrained, compared with lending for property, the latter unproductive, and simply stoking household debt. Productive lending for growth is under pressure. Personal credit fell again to $147.9 billion, down 0.2%.
Looking at the 12 month growth figures, investment lending is now below the 10% speed limit, at 9.1%, whilst owner occupied loans are at 6.5%, the highest rate for 6 years (Feb 2011).
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