The December 2018 data from the RBA has been released today, and credit growth continues to slow, led down by both housing and business finance. That said total credit is still expanding, and housing credit reached a new record, $1.8 trillion dollars. Within that Owner occupied loans were reported at $ 1.21 trillion dollars and Investment loans $0.59 trillion, accounting for 32.9% of all housing lending. Credit to business was up a little to 32.8% of all lending stock. Personal credit shrank again.
The share of lending for housing investment fell again, while the business mix was up just a little.
Total credit for housing was an annualised 4.7% compared with 6.3% a year ago. Personal credit was down again, to -2.0% over the past year, compared with -1.1% a year before, and business credit was at 4.8% compared with 3.1% a year back.
Within the housing sector, home lending for investment purposes was at 1.1% and for owner occupation a (still massive) 6.5%. Still way higher than inflation and wages, so household debt ratios will continue to deteriorate.
The monthly movements show a fall in business lending momentum and owner occupied lending, though a small uptick in investor loans, if from a low base.
The APRA data is also out today, so we will look at this later… But we can conclude the overall growth in housing lending is still building more risks in the market, despite all the hype. Credit loosening should be resisted.
