Australian Housing Credit Growth Levelling Out?

Australian Property is an interesting beast. Some call it a bubble ready to pop, and others say Australia is different from the rest of the world’s property markets, and is anything but a bubble.

This blog doesn’t take a position either way, we simply look at the charts and graphs that flow from time to time.

One thing that many property bulls, bears and a third rare breed which we’re going to call questioners all acknowledge that housing price growth is linked closely to housing credit growth. Such a link makes sense, after all how can the population pay more, and contribute to increasingly higher priced houses, if they can’t borrow more to pay more?

Today’s chart comes from Leith Van Onselen over at Macrobusiness. From his article, Australian Housing Credit Growth Subdued in February.

Housing credit grow Australia Jan 2010 to February 2012

From the article:

“Personal credit growth (+0.3% MoM; -0.1% QoQ; -1.1% YoY) rose slightly in February, but remains lower over the year. By contrast, business credit (0.4% MoM; 0.4% QoQ; 1.2% YoY) and housing credit (0.4% MoM; 1.3% QoQ; 5.3% YoY) grew over the year, but at subdued levels relative to their long-run average growth rates …. annual credit growth hit a fresh all time (35-year) low of 5.32%. However, the below chart, showing monthly housing credit growth on a 3-month moving average basis (3MMA), suggests that housing credit growth has now levelled-out after trending down since March 2010.”

Housing Credit Growth

From the article:

“For the first time since September 2011, monthly investor housing credit (0.5% MoM; 1.3% QoQ; 4.8% YoY) grew at a faster pace than owner-occupied housing credit (0.4% MoM; 1.3% QoQ; 5.6% YoY).”

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About Ed.

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