Credit growth doldrums
And now to the last of the data dumps from today!
Housing credit growth continued to slow to just 3.1 per cent - a record low - well down from 5.2 per cent a year earlier, reflective of lower stock turnover and prices in the first half of this year.
ANZ's FY2019 figures this morning confirmed that the stock of interest-only loans continues to decline significantly, and provided evidence that more households are amortising their debt more quickly.
Investor credit growth was actually negative over the year.
Remember, though, that these figures lag (note how housing credit hit a nadir in 2013, long after Sydney and Melbourne were on the road to recovery).
Remember, though, that these figures lag (note how housing credit hit a nadir in 2013, long after Sydney and Melbourne were on the road to recovery).
Business credit growth slowed from a year earlier to just 3.3 per cent, while personal credit growth was a hugely negative -4.4 per cent year-on-year.
Overall, this took annual credit growth down to just 2.72 per cent, the slowest level since June 2011, and essentially a borderline recessionary level.
The wrap
Overall, it was moribund set of numbers, which again raises the question of why markets are threatening to price out further easing of monetary policy.
One conclusion is that markets think the inflation target has effectively been abandoned - short of linking central banker remuneration to hitting the target it's hard to see how we'll get back to an average of 2 to 3 per cent any time soon.
Another possible answer is that the housing market is now picking up strongly, as CoreLogic will confirm in its monthly data report tomorrow.
As I discussed here all the way back in March - when all the doom and gloom was raging - credit growth is the wrong place to look for a turnaround in the housing market.
