Broad money slows further
This is the last time I'll look at the Reserve Bank's Financial Aggregates in 2018, so let's spend a little bit of time on it.
Firstly, the good: business credit recorded back-to-back 0.6 per cent growth in September and October 2018, for annual growth of a solid 4.7 per cent, up from 3.9 per cent a year earlier.
Unfortunately this wasn't enough to stop broad money growth pushing fresh quarter-century lows in October 2018 at under 1.9 per cent. Yuck.
While not an easy thing to measure, such weak broad money growth is a poor leading indicator for the economy and tends to be associated with periods of soft inflation.
Housing credit growth notched only 0.3 per cent in the month and 5.1 per cent for the year to October, down from 6½ per cent a year earlier.
Housing credit: detail
Owner-occupier credit growth of 7 per cent into the face of softer prices remained solid, but investor credit growth of 1.3 per cent is now the slowest on record.
It's an unusual situation: real estate groups report that investors want to borrow and invest but can't get access to credit.
Despite strong growth in the 25-34 year old cohort through the resources boom and beyond, the share of outstanding housing credit pertaining to investors has now dropped from a peak of 38.6 per cent to 33 per cent, and is still falling quickly.
It's difficult to say how long it might take, but eventually this would have to manifest itself in a available rental properties, particularly as Chinese investment has also disintegrated.
Although absolute population growth is strongest in Sydney and Melbourne, these cities also have an overhang of off-the-plan settlements to cushion any such shock to the rental market, at least for the time being.
For that reason the first reports of a 'rental crisis' are more likely to emerge in smaller capital cities such as Hobart, Canberra, and perhaps Adelaide, and regional locations such as the Hunter Valley, Coffs Harbour, Wagga, Bowral, and Dubbo in New South Wales, then Ballarat, Shepparton, Warrnambool, and Mildura in Victoria, and so on.
Even some of the basket case resources regions could be heading towards renewed rental shortages as once-bitten investors remain spooked away.
Finally - if you'll kindly forgive some weekend curve-fitting - although housing credit growth has slowed, historically it's tended to be the derived rate of change that's been more important to housing prices, at least at the capital city level (this index of home values itself being heavily weighted to Sydney and Melbourne).
This 3-months advanced 'credit impulse' - a brainchild of ANZ's research team - deteriorated earlier in 2018, and remains at a level implying soft home prices in early 2019.
One caveat here is that the shift away from interest-only lending and mortgage prepayments may have changed household cashflow profiles a little, so past performance is no guarantee of future trends.
Moreover, it's only an indicator - it doesn't tell you much about the performance of localised housing markets, some of which are faring considerably worse than others.
The Royal Commission final report is due for release on 1 February.
