Annual housing credit growth slows to weakest pace on record

Annual housing credit growth has slowed to its weakest pace since records began in 1976.

Loans to property investors edged up just 0.3 per cent over the past year, a record low. Picture: iStock.

Lending to property investors shrank in July while credit to businesses edged up slightly, statistics from the central bank suggest.

The numbers showed overall private sector credit grew 0.2 per cent — meeting market expectations and up from 0.1 per cent in June — and that credit for mortgages increased 0.3 per cent compared to a 0.2 per cent rise in the previous month, while credit to business was up 0.2 per cent and personal credit fell 0.4 per cent.

The financial aggregates data released by the Reserve Bank of Australia on Friday indicated that overall credit rose 3.1 per cent over the past year, as housing credit grew 3.3 per cent, the slowest growth rate since records started in 1976.

Business credit gained 3.9 per cent, while personal credit fell 3.7 per cent in the 12 months to July.

Loans to property investors fell 0.1 per cent during the month — its largest contraction since August 1991 — and edged up just 0.3 per cent over the past year, another record low.

Owner-occupier credit grew 0.5 per cent in July compared to the previous month, with the 4.9 per cent annual increase the weakest since May 2014.

AAP