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Andrew Hanlan, analyst at Westpac, points out that the Australia’s credit growth has been slowing as credit grew by 0.2% in December and again by 0.2% in January.

Key Quotes

“Credit grew by 6.6% in 2015, moderating to 5.6% in 2016, 4.8% in 2017 and then 4.4% for 2018. Annual growth is now 4.3%.”

“Key to this trend has been the housing sector. Housing credit growth has slowed over recent years: from 7.4% in 2015; 6.3% in both 2016 and 2017; to 4.7% in 2018. The latest annual reading is 4.4%.”

“Momentum in housing credit, as measured by 3 month annualised growth, has slowed progressively from a peak of 6.7% in May 2017 to be 3.2% currently.”

“More generally, business credit growth is expanding at a moderate underlying pace as firms in the non-mining economy increase investment in the real economy.”