The Reserve Bank of Australia (RBA) has released the private sector credit aggregates data for the month of April:
Total credit provided to the private sector by financial intermediaries grew by 0.3 per cent over April 2013 after increasing by 0.2 per cent over March. Over the year to April, total credit rose by 3.1 per cent.
Housing credit increased by 0.4 per cent over April following an increase of 0.4 per cent over March. Over the year to April, housing credit rose by 4.5 per cent.
Other personal credit decreased by 0.3 per cent over April after increasing by 0.1 per cent over March. Over the year to April, other personal credit decreased by 0.2 per cent.
Business credit rose by 0.2 per cent over April after decreasing by 0.1 per cent over March. Over the year to April, business credit increased by 1.4 per cent.
A chart showing the long-run breakdown in the components is provided below:
As you can see, personal credit growth (-0.3% MoM; 0.0% QoQ; -0.2% YoY) continues to deleverage, whereas business credit growth (0.2% MoM; 0.1% QoQ; 1.4% YoY) and housing credit growth (0.4% MoM; 1.2% QoQ; 4.5% YoY) remains positive in annual terms, but are at subdued levels relative to their long-run average growth rates.
Focusing on the housing market, annual credit growth has finally rebounded from its all time (36-year) low of 4.40% achieved last month. Further, as shown by the below chart, housing credit growth is clearly recovering, albeit off a low base:
Finally, a breakdown of owner-occupied credit (0.4% MoM; 1.1% QoQ; 4.0% YoY) and investor credit (0.5% MoM; 1.4% QoQ; 5.5% YoY) is provided below:
As you can see, much of the current mortgage demand is being driven by investors, which has also been reflected in recent housing finance data from the Australian Bureau of Statistics.
