Annual property credit crawls to low: RBA

Michael Mehr
(Australian Associated Press)


Loans to property investors contracted to unprecedented levels in November on an annualised basis, the central bank’s statistics say.

Numbers from the Reserve Bank of Australia suggest overall private sector credit grew by 0.1 per cent during the month, short of market expectations of a 0.2 per cent rise.

Credit for mortgages increased by 0.2 per cent in November, less than the 0.3 per cent gain in October, while credit to business was also up 0.2 per cent for the month and personal credit fell 0.5 per cent.

The financial aggregates data released by the RBA on Monday indicated overall credit rose 2.3 per cent over the past year as housing credit grew 2.9 per cent, the slowest rate since records started in 1976, while business credit gained 2.5 per cent and personal credit fell 4.9 per cent.

The year-on-year overall private sector credit figure was the most tepid since the 2.2 per cent recorded in April 2010.

Loans to property investors fell 0.1 per cent during November and, in another all-time low, shrank 0.3 per cent over the past year.

Owner-occupier credit increased by 0.4 per cent in November, the smallest monthly gain since June, and the 4.7 per cent annual rise was the weakest since March 2014.

There was little sign of an uptick in credit that some economists were waiting on to tie in with property price increases logged by CoreLogic indices in Sydney and Melbourne in recent months.

Some analysts have said debt levels may be reducing overall because mortgage holders haven’t asked lenders to reduce their payments following RBA rate cuts.


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