Australia Y/Y Pvt Sector Credit Growth Picks Up Pace in Aug

     SYDNEY (MNI) - Private-sector credit data for August published by the

Reserve Bank of Australia on Friday:

                               August          July        August          July

-------------------------------------------------------------------------------

                         % Change m/m  % Change m/m  % Change y/y  % Change y/y

Total Credit                     +0.5          +0.5          +5.5          +5.4

Housing                          +0.5          +0.5          +6.6          +6.6

-Owner-occupier Housing          +0.5          +0.5          +6.3          +6.2

-Investor Housing                +0.4          +0.4          +7.3          +7.4

Business                         +0.5          +0.5          +4.5          +4.2

Other Personal                   -0.2           0.0          -1.1          -0.8

     FACTORS: Total private-sector credit growth rose 0.5% m/m in August, but

the y/y pace picked up slightly to the highest so far this year. Housing credit

remained the main contributor to total credit, with business credit make a

strong contribution with the sixth straight months of increase. The y/y pace of

business credit was the highest since January this year. Personal credit growth

remained a drag, falling 0.2% m/m, and y/y growth down the most in the 20 months

of decline. Investor mortgage growth rose at the same pace as July, despite the

latest month seeing a larger switch from investor to owner-occupier mortgages of

A$1.7 billion, the highest since February 2016. Partly explaining the continued

switch is the rise in mortgage rates for investor loans in the past few months. 

     TAKEAWAY: The data shows private sector credit growth has slowed from the

6%-plus y/y growth pace posted in 2016 and while the latest month saw a small

pickup, it was due to a bigger contribution from business credit which is a

positive. Overall, the continued growth in mortgages shows the Reserve Bank of

Australia needs to keep a close watch on housing activity trends. 

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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