The RBA has just released its latest Financial Aggregates data which shows the demand for what they euphemistically call “credit” but we all know is debt.
The data showed that total credit grew 0.4% in July to be up 5.1% on the year before. But it’s the growth of housing which continues to be the key focus.
In July housing debt rose 0.5% to sit 6.5% higher than the year before. Personal loans are on the way out it seems, with growth of just 0.2% and an annual rate of just 0.08%, while business loans hardly registered a pulse with growth of just 0.3% to 3.4% year on year.
The break down of the data showed that it is still the love affair of investor housing which is driving demand, with investment housing up 8.9% year on year.
To put this in context the last time investment housing demand was higher than this as an annual growth rate was May 2008 – before the GFC really kicked off.
Of course the RBA wants ‘animal spirits’ to drive the economy and they are clearly evident in this data.
But I can’t help but be reminded of the Robot in Lost In Space – “Danger Will Robinson”.