Annual property lending hits new lows: RBA
The pace of lending to property buyers grew only slightly in August, below the rate in July, according to statistics from the central bank that have defied economists' expectations.
The numbers showed overall private sector credit grew 0.2 per cent - below market consensus forecasts of a 0.3 per cent rise - and that credit for mortgages increased 0.2 per cent compared to a 0.3 per cent rise in the previous month while credit to business was up 0.2 per cent and personal credit fell 0.2 per cent.
The financial aggregates data released by the Reserve Bank of Australia on Monday indicated overall credit rose 2.9 per cent over the past year as housing credit grew 3.1 per cent during that period, the slowest growth rate since records started in 1976.
Business credit gained 3.4 per cent and personal credit fell 3.4 per cent in the 12 months to August.
Loans to property investors shrank 0.1 per cent in August - the sixth consecutive month of falls and its largest monthly contraction since August 1991 - and edged up just 0.06 per cent on an annual basis, another record low.
Owner-occupier credit expanded by 0.3 per cent in August following an 0.5 per cent gain in July, with the 4.7 per cent annual increase the weakest since March 2014.
"Despite early signs of a housing price turnaround in major capital cities, housing sector credit turned weaker," St George analyst Nelson Aston said.
"The slowing growth in aggregate credit while new lending has been expanding suggests that many households are paying down their loans at a relatively faster rate."
Several other economists said they still expected credit numbers to increase following the Reserve Bank of Australia's cuts to the cash rate in June and July, with Westpac's Andrew Hanlan suggesting there was a delay in the effects of lower interests rates appearing in the statistics.
"The reason for this apparent puzzle is that mortgagors repayments take a little time to adjust to the lower rates," Mr Hanlan said.
"'New' debt will eventually show up in the published credit figures. But it is not happening yet," Commsec analyst Craig James said.
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