Credit growth was lifting, then...

Lockdowns biting again

Credit growth in the Aussie economy had just just lifted back to 3.1 per cent, but then Sydney and Brisbane have gone back into crushing lockdowns.

Melbourne also had yet another lockdown, so Q3 will be a total write-off for the economy.

So that's the end of the road for the promising recovery in Australia, then.

Housing credit was strong, and picked up to 5.3 per cent annual growth for the financial year to June.

Obviously that's not a huge number in itself - certainly in historic terms - but the acceleration has been strong, pointing to 15 per cent annual price gains for the capital cities.

And sure enough CoreLogic will report just that, with Sydney and Brisbane recording 2 per cent price gains in July, and Adelaide and Melbourne posting solid increases (leading to a 1.6 per cent monthly gain for the capital cities).

Notably investor credit growth is bouncing off record lows, while rental vacancy are heading to all-time lows, with very tight rental markets in evidence around the country.

For that reason, any regulatory intervention next year seems likely to adopt a different tack, perhaps targeting high debt-to-income borrowers rather than investors (or perhaps a variation on that theme).

Conflicting reports today on the reopening of Australia, with Grattan (surprise) saying that 80 per cent fully vaccinated won't high enough to end lockdowns, and presumably that we will need to get into vaccinating the kids.

If I understand this correctly, this appears to imply support for up to a further 9 months of lockdowns for a virus with a median age of death approaching 85 in Australia, which is too depressing to even think about for a Monday morning.

It's so mind-boggling, I can't even raise a comment, except to say my bet is on Sydneysiders tolerating about five or six more weeks before the dam bursts.

Full disclosure, I'm currently travelling on the Portuguese Algarve Coast, where I'm glad to say life is totally back to normal, but in fairness Europe has done it's fair share of lockdowns over the past year too.