Australian total private sector credit growth rebounds in July

Australian housing credit impulse rises in July. The total private sector credit growth rebounded in the month, rising to 0.4 percent on a sequential basis from June’s 0.3 percent rise. However, on a year-on-year basis, the growth rate decelerated from 4.5 percent in June to 4.4 percent in July.

Delving into details, the housing credit growth remained stable at 0.4 percent on a sequential basis. On a year-on-year basis, the credit growth dropped to 5.5 percent. Meanwhile, the investor credit growth rebounded sequentially to 0.1 percent, as compared with the 0.1 percent fall recorded in the prior month. On a year-on-year basis, the investor credit growth remained stable at 1.6 percent. Owner-occupied credit decelerated to 0.5 percent sequentially, which put annual growth at 7.6 percent.

Business sector rose 0.5 percent sequentially from June’s 0.3 percent rise. On a year-on-year basis, credit to businesses rose 3.4 percent from June’s 3.3 percent. Personal credit fell 0.1 percent sequentially, the fifthly monthly fall in six months.

The rise in housing credit was enough to stimulate the housing credit impulse, which tends to lead changes in housing prices. While just a single data point, it is a positive sign as a sustained rebound in the credit impulse might be a lead indicator of stabilization in housing prices.

“That being said, the environment remains challenging with lending standards tighter in the past and one of the majors lifting its floating mortgage rate”, stated ANZ in a research report.

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