Australia: Credit growth slowing - Westpac

Andrew Hanlan, Research Analyst at Westpac, points out that the Australian credit growth has been slowing as the housing sector cools in response to tighter lending conditions and a softening of demand.

Key Quotes

“Total credit grew by 0.4% in the month of October, including a 0.30% rise for housing and a 0.6% expansion in business. Annual credit growth is 4.6% currently, moderating from 5.2% a year ago.”

“Momentum in housing credit, as measured by 3 month annualised growth, has slowed progressively from a peak of 6.8% in May 2017 to be 4.2% currently.”

“Business credit remains volatile around a modest uptrend. Over the past four months, business credit grew by a brisk 8% annualised pace, up sharply from 3.2% growth over the previous year. The pace of the past four months, most likely boosted by some M&A activity, is unlikely to be sustained in the current economic and financial backdrop.”