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Andrew Hanlan, Research Analyst at Westpac, explains that Australian credit growth has been slowing as the housing sector cools in response to tighter lending conditions.

Key Quotes

“Total credit grew by 0.4% in July and by 0.5% in August, an improvement on the weak outcomes over May, +0.2%, and June, 0.3%.”

“Annual total credit growth is now 4.5%, moderating from 4.8% for 2017, 5.6% in 2016 and a 6.6% expansion in 2015.”  

“Housing credit growth over the past year is 5.4%, down from 6.3% for both 2016 and 2017, and well below the 2015 outcome of 7.4%.”

“Currently, business credit growth is undershooting growth in non-mining business investment, the reverse of the experience in recent years, suggesting a greater reliance by businesses on other sources of funding, including retained earnings.”