Lending for housing will grow by more than 10% a year without measures to pull back investors in property, says Societe Generale.
Australia’s love for credit, growing at 5.7% a year, is at its highest since before the GFC in 2009.
In a note to clients, Societe Generale says: “In the absence, to date, of macro-prudential measures to contain the growing share of housing investors, this segment is likely to continue to grow at annualised rates in excess of 10%,” Societe Generale says.
Demand for credit from owner occupiers, still twice as large as the investor component, is also likely to remain strong.
The Reserve Bank numbers for October released today show the pool of private credit in the economy growing unexpectedly jumping higher by 0.6%, the second month of growth in a row.
This put annual growth in credit at 5.7% for the year, the fastest since early 2009.
Credit to housing increased 0.6%, the same rate as in the previous two months.
Monthly growth for housing investors grew 1% for the month, double the rate of owner-occupiers.
The pool of lending to investors grew 9.7% for the year and for owner occupiers by 5.1%.
Stephen Walters of J.P. Morgan Australia says there are no immediate implications for policy in today’s data.