Australia’s total private sector credit rises strongly in October on solid growth in housing credit

Australia’s total private sector credit came in strong again in October, helped by growth in the housing sector. On a year-on-year basis, the total private credit rose 5.3 percent, whereas it rose 0.5 percent on a month-on-month basis in October.

Housing credit mainly drove the strong growth in total private sector credit. It expanded at a strong pace of 6.4 percent year-on-year and at 0.6 percent on a sequential basis. Notably, after decelerating in response to regulators’ intervention last year, which was aimed at easing investor borrowing, investor finance is expanding again. Investor credit was up 5.3 percent year-on-year and 0.7 percent month-on-month in October.

Alongside the ongoing strength in auction clearance rates, the investor credit increases gives additional evidence that confidence in housing market continues to be positive. On the contrary, credit to owner-occupiers growth has remained stable at 0.5 percent on a sequential basis for the last few months. On a year-on-year basis, credit to owner-occupiers was up 7.1 percent.

Business credit was up in October too. It rose a modest 0.5 percent month-on-month. However, the growth continues to decelerate on an annual basis. New finance approvals have also risen recently after earlier softness, proving tentative evidence of certain improvement in the outlook, noted ANZ in a research report. On the other hand, personal credit remained flat in the month, with the annual rate decelerating further to -1.1 percent.

At 05:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was highly bullish at 100.296, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -115.381. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex