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PERSONAL/BUSINESS COACH | PROPERTY BUYER | ANALYST

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Friday, 1 December 2023

Credit growth picks up, but only for housing

Housing credit firms

Housing credit growth firmed in October, increasing by +0.37 per cent, which was the largest monthly increase in 11 months. 


The increase was largely driven by owner-occupiers.

On the other hand, higher mortgage rates are leading more investors to sell, and net credit growth to investors was very weak again in October - as it has been all year - at only +0.2 per cent. 

No end in sight for the rental crisis here...


Capital city prices are up +8½ per cent over the past year, and have outpaced the credit impulse indicator due to record high immigration, developer insolvencies and project cancellations, and very low stock levels. 


Overall credit growth for the month was soft at +0.3 per cent, matching the recent pace of growth, and pointing to a slowdown in the economy in 2024. 


In other news, the US PCE Price index fell to 3 per cent, far below the peak at 7 per cent of mid-2022, and the lowest since March 2021.

The Federal Reserve's preferred measure of core PCE slowed to 3½ per cent, also the lowest since early 2021, and almost 2 per cent below the Federal Funds rate. 

Monetary policy settings are the most restrictive since...2007.

Markets are accordingly pricing for 5 interest rate cuts in 2024 for the US. 

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