Mirroring the trend seen in recent housing finance data released by the ABS, there’s further evidence that housing investors are returning to Australia’s property market.
According to private sector credit figues released by the Reserve Bank of Australia (RBA) on Monday, credit to Australian housing investors rose by a further 0.6% in September, leaving the year-on-year increase at 4.8%.
Not only was it the largest increase in percentage terms since August 2015, it marked the first year-on-year acceleration seen since April last year.
While credit growth to investors started to lift, that to owner-occupiers continued to decelerate, growing 0.5% for the month, leaving the increase on a year earlier at 7.3%.
Credit to owner-occupiers has now grown by 0.5% in each of the past four months, leaving the annual pace of growth at the lowest level since January this year.
Combined, housing credit rose by 0.5% in September, leaving the increase on a year earlier at 6.4%, the slowest pace seen since June 2014.
In dollar terms, the value of Australia’s outstanding housing debt now stands at $1.5942 trillion. Owner-occupier credit sits at $1.0366 trillion while that to investors totals $557.6 billion.
A slowdown in housing market turnover, along with continued signs of homeowners preferring to pay off debt rather than to spend, may have contributed to the slowdown in housing credit growth.
Outside of housing, credit demand from businesses and for personal reasons remained weak.
Credit to businesses expanded by 0.2% following increases of 0.3% and 0.1% in July and August, leaving the annual increase at 4.7%.
That was down on the 5.7% level seen in August and close to half the annual pace seen in April.
Indicating that recent strength in house prices and falling unemployment has not been enough to lift consumer borrowing, personal credit continued to slide.
It fell by a further 0.1% in September — the ninth consecutive monthly decline in a row — leaving the annual drop at 1.3%, the largest seen since May 2012.
Courtesy of the moderation in housing and business credit growth, along with a drop in personal demand, credit extended to Australia’s private sector grew by 0.4%, leaving the annual increase at 5.4%, the weakest expansion seen since September 2014.
The annual change in each component can be found in the chart below: