REPEAT:MNI ANALYSIS: Australia Mortgage Growth At 4.5-Yr Low

Repeats Story Initially Transmitted at 01:57 GMT Aug 31/21:57 EST Aug 30

--M3 Growth Stuck Near 26-Yr Low

By Sophia Rodrigues

     SYDNEY (MNI)  - Australia's annual housing credit growth slowed in July to

the lowest rate since December 2013 as the slowing in owner-occupier mortgages

came on top of a significant drop in the pace of investor mortgage growth. 

     The data shows the housing market continues to slow and there is a risk the

pace could accelerate following the out-of-cycle mortgage rate hike announced by

Westpac earlier this week which is expected to be followed by the other big

banks.

     Data published by the Reserve Bank of Australia Friday showed housing

credit rose 5.5% y/y, the slowest pace since December 2013. The annual growth

has been dragged lower by investor mortgages which has been witnessing a

sustained decline in pace since mid-2015.

     In the latest month, investor mortgages grew 0.1% m/m, rebounding from a

0.1% fall the month before. This was the first month since July 2015 -- when

some investors started switching their housing loan purpose to owner-occupier --

that saw no such switching, and this partly explains the rebound.

     However, despite no switching owner-occupier mortgages rose at a faster

pace in July, up 0.4% m/m compared with 0.3% rise in June.

     Overall credit rose 0.4% m/m in July, slightly higher than MNI median

forecast, but the y/y pace was unchanged at +4.4%.

     Business credit was the main contributor to the growth, rising 0.5% m/m

versus a 0.3% rise in June, and helping the y/y pace improve to +3.4% versus

+3.2%.

     Other personal credit continued with its recent soft trend, falling 0.1%

m/m and the y/y pace fell 1.4%, faster than 1.3% fall in June.

     Meanwhile, the data also showed the trend of slowing in money supply growth

in Australia continued in July. Both M3 and broad money was flat m/m, slowing

from a 0.2% rise in June, though the y/y growth was flat at near 26-year low. 

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