Housing credit impulse picking up

Retail sales stall: per capita recession looms

Retail turnover had been expected to get a boost from tax cuts in July, but as it turned out nominal turnover was flat in the month at a seasonally adjusted $36.16 billion.

Although food retailing increased with population growth, all other industries were flat or going backwards.

Obviously that's a disappointing result, but I'd probably want to see the August figures before concluding that everybody is definitively saving their tax cuts! 

In volume terms, we've been in a retail recession for around 1½ years now. 

James Foster is your go-to guy for all the key detailed analysis.

It looks as though GDP growth for the June quarter will be soft, and perhaps very soft or even flat.

National Australia Bank is forecasting anemic quarterly GDP growth of +-0.1 per cent, for example, pointing to a per capita recession.

Housing credit firms

In lesser reported news, the Reserve Bank of Australia released its latest Financial Aggregates data for July 2024, which revealed credit growth to be trending higher.

Business credit growth has been surprisingly robust over recent months, while housing credit growth was a sprightly +0.48 per cent in July, which was the strongest rate of growth in 2 years.

Over the year to July, total credit growth picked up to +5.7 per cent (from +5.3 per cent a year earlier).

Investor credit growth was steady at a fairly modest +0.38 per cent, with plenty of landlords still offloading properties to balance their cashflows.

Total housing credit growth over the year picked up to +4.9 per cent, and looks to be gathering some momentum.

Indeed, the housing credit impulse was the strongest in about 2½ years, although an increase in listings should keep a lid on housing price growth at the national level.

With interest rates expected to drop over the next 18 months, it should be a solid period ahead for housing.

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