MNI 5 Things:RBA Private Sector Credit:Investor Mortgage Slows

By Sophia Rodrigues

     SYDNEY (MNI)  - Below are the five observations we made from Private Sector

Credit data for January published by the Reserve Bank of Australia on Wednesday:

     --Private sector credit rose 0.3% m/m in January, falling short of MNI

median forecast for the second month in a row. The y/y rise remained at +4.9%

for the second straight month but was below 5.0% for only two months since May

2014.

     --There was a significant change in the y/y pace of owner-occupier and

investor loan growth following a change in the way this is being reported. The

RBA noted the large switching of loans from investor to owner-occupier category

has decreased significantly and it was unnecessary to adjust the published

growth rates to undo the effect of these regular switching flows. "Accordingly,

henceforth, adjustments for switching flows will only be applied to the growth

figures over the period from mid to late 2015 when reported switching was

unusually large, but not thereafter," the RBA said. With these changes, investor

loan growth y/y fell to +3.0%, the lowest since November 2016 and well below the

peak of 10.8% seen in mid-2015. Offsetting this was a rise in owner-occupier

loan growth.

     --Business credit growth fell 0.1% m/m, falling for the first time since

February last year. Business credit growth was the key drag on overall loan

growth for the second straight month.

     --Other personal credit rose 0.1% m/m. Though small, this was the first

growth since August 2015. Between then and January, monthly personal credit

growth has moved in the narrow -0.3% to 0.0 range.

     --Total housing loan growth slowed to +6.2% y/y -- the lowest since May

2014. 

     Below is the table of key figures:

                              January      December       January      December

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

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

Total Credit                     +0.3          +0.3          +4.9          +4.9

Housing                          +0.5          +0.4          +6.2          +6.3

-Owner-occupier Housing          +0.6          +0.6          +8.0          +7.9

-Investor Housing                +0.2          +0.2          +3.0          +3.3

Business                         -0.1          +0.1          +3.4          +3.2

Other Personal                   +0.1           0.0          -0.9          -1.1

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

[TOPICS: MTABLE,M$A$$$,M$L$$$,MT$$$$]