Lending to households and businesses grew by 2.3% in the year to November 2019, while it grew by 0.1% over the past month. 

According to the RBA's data, that 2.3% growth rate is the smallest since April 2010 (2.2%), and should boost the chances of another RBA rate cut occurring early next year after last week's positive unemployment figures.

This is the 13th consecutive month that credit growth has fallen - a lack of credit growth essentially means people aren't taking out loans for houses. 

Indeed, housing credit grew by just 0.2% for the month and 2.9% over the year. 

House prices have surged recently, particularly in Sydney and Melbourne, pushing annual housing growth into the positives for the first time since April 2018, following solid declines from 2017's peak. 

However housing credit is a function of both house prices and the volume of properties on the market and being sold.

This is why we're seeing these weak credit growth numbers.

Credit for purchases other than housing (personal credit) such as car loans or personal loans fell by 0.5% month-to-month and by a significant 4.9% year-on-year, while lending to businesses rose by 0.3% and 4.4% respectively. 

Investor numbers fleeting 

Much of the downturn in housing credit growth appears to be somewhat driven by investors. 

In November 2018 investor credit growth was in excess of 1.1% annually, and even managed to hit more than 10% back in 2015. 

But November 2019's annual investor credit growth figure was -0.3%, a negative number for the fourth time in the last six months. 

Owner-occupied credit growth hit 0.4% monthly, which is the smallest figure since June, while its annual 4.7% growth is the lowest since February 2014. 

Monthly growth  Annual growth 
Owner-occupier loans 0.4% 4.7%
Investor loans -0.1% -0.3%

With three interest rate cuts occurring in 2019, and at least one more expected to happen in 2020, interest rates are at record lows at the moment and don't look like changing anytime soon. 



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