Australian housing credit growth continues to trend lower

Australian private sector credit growth came in stable in the month of January. However, housing credit continues to decelerate, with owner-occupier finance rising at its slowest monthly rate in six years.

The total private sector credit growth rose 0.2 percent sequentially in the month. On a year-on-year basis, the growth rate decelerated to 4.3 percent from 4.4 percent.

Housing sector credit growth decelerated in the month on a sequential basis to 0.2 percent in January from December’s print of 0.3 percent, bringing the annual growth rate to 4.4 percent, the slowest since 2013. The investor credit growth remained stable at 0.1 percent on a sequential basis. On a year-on-year basis, the investor credit growth came in at 1 percent.

Owner-occupier credit growth decelerated to 0.3 percent from 0.4 percent, while the year-on-year rate came in at 6.2 percent. Business sector credit growth was stable at 0.3 percent sequentially and improved to 5.2 percent year-on-year.

“The housing credit impulse declined further in January, consistent with further declines in house prices. While there have been incipient signs of improvement in the housing story – through higher auction clearance rates – a near-term stabilisation in prices would require a significant, and unlikely, unwind in the credit tightening that has driven the declines in prices”, said ANZ in a research report.

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