Lending lifts
Housing credit growth lifted to +3.6 per cent in January, the strongest level since the last federal election in May 2019.
The credit impulse turned decisively positive in October last year, and has continued to be a decent indicator of turning points.
The impulse indicator may somewhat understate price growth potential due to the distortion of stimulus payments, early superannuation release, and a massive switch across to principal and interest mortgage products which has pushed down credit growth as loans are repaid.
Investor credit growth once upon a time could run at 25-30 per cent, but for the past 18 months has been negative for the first time in history.
If you use a magnifying glass you can call it positive in January 2021.
The little credit growth there is has been driven by construction loans, first homebuyers, and upgraders, so there's no benefit in calling for changes to lending standards - markets will begin to sort themselves out in any case as listings begin to increase.
The latest wages growth figures will show nominal wages growth at all-time lows, so it's hard to see core inflation sustainably getting back to target for a year or three yet.
