MNI: Australia RBA Pvt Sector Credit Accelerates on Biz Loans

By Sophia Rodrigues

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

Reserve Bank of Australia on Friday: 

                             November       October      November       October

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

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

Total Credit                     +0.5          +0.4          +5.4          +5.3

Housing                          +0.4          +0.5          +6.4          +6.5

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

-Investor Housing                +0.4          +0.4          +6.4          +6.9

Business                         +0.7          +0.4          +4.7          +4.3

Other Personal                   -0.2          -0.1          -1.2          -1.0

     FACTORS: Total private sector credit growth accelerated in November as a

slowing in housing loan growth was offset by faster growth in business loans.

Business credit grew month-on-month at the fastest pace since June, leading to

the fastest rate of year-on-year growth in 2017. Housing loan growth

month-on-month slowed to a rate last seen in March 2016, mainly because of

investor loan growth, which rose at a 0.4% month-on-month pace for three months

in a row. In year-on-year terms, investor loan growth slowed to a rate last seen

in January. Personal loan growth remained a laggard, with the month-on-month

rate falling for two straight months and the year-on-year rate down for 23

months in a row, including the most during this period.

     TAKEAWAY: The data shows that private sector credit growth remains below

the 6%-plus year-on-year pace posted in 2016. The continued slowing in investor

housing credit growth is a welcome development, but given the overall slowing in

housing market activity, financial regulators may be worried about pushing down

too hard on investor lending. While the rise in business credit is a positive,

the continued decline in personal credit growth may become a concern if it is a

sign of household spending caution. In the end, household consumption is very

important for the central bank's monetary policy, and both personal credit and

overall housing market conditions are important for its forecasts on

consumption.

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

[TOPICS: MTABLE]