Credit growth picks up...for housing
Housing credit growth picked up to 4.8 per cent in May 2021, which is stronger but well behind the growth in incomes for the property buying cohorts this year.
The credit impulse implies strong growth, and will likely be reflected in 12 per cent growth price growth over the year to June for the capital city markets.
Investors have largely been sidelined since 2017, but credit growth has now finally turned positive in this segment, albeit at just 1.6 per cent growth over the year to May.
Total investor credit is broadly unchanged over the past two years, as more loans have rolled off interest-only terms, which average mortgage rates have declined sharply.
Business credit growth and personal credit growth were positive in May, but only just, and were both lower over the year.
Total credit growth was very weak at just 1.9 per cent, well down from 3.2 per cent a year earlier.
Overall, property investors should be expected to take over from first homebuyers in driving the market from H2 2021.
