Loans to the private sector grew at a slightly lower rate in April, driven by a slowdown in lending to “owner-occupiers” and the business sector. Figures released by the RBA indicate total private credit growth in April was 0.4%, in line with expectations and at the same rate as in March. However, total credit growth for the last 12 months was 4.9%, down from the 5.0% growth rate recorded for March.
Growth in personal loans continued to fall and lending in this segment is 1.5% lower than a year ago. Since October 2008, Australians have been generally reluctant to take on additional personal debt, which is in stark contrast with their views on housing loans. Investor loans grew by 7.3% year on year, up from March’s comparable figure of 7.1%, while owner-occupier loan growth slipped from 6.2% in March to 6.1% in April. ANZ senior economist Daniel Gradwell contrasted households’ views on personal debt with their views on mortgages. “It’s interesting to note that the stock of personal credit is now 5% below the pre-GFC peak in February 2008. On the other hand, housing credit has increased nearly 80% over the same period. Australian households have added significant to their total debt levels since the GFC, entirely driven by housing.”
