Credit growth still weak

Housing and business finance activity maintained its weak growth rate in April. Figures released by the Reserve Bank and the Australian Prudential Regulation Authority on Friday show private sector credit growth increasing at around three per cent a year.

According to the RBA, housing credit grew by 0.4 per cent in April and by 4.5 per cent over the 12 months to April.

The mortgage market may be picking up; over the three months to April the annualised growth rate was 4.9 per cent.

Business credit was up 0.2 per cent in April, after being flat in March. It was up 1.4 per cent over the 12 months to April.

Credit card and other personal lending continued to fall back. According to the RBA, personal loan balances fell 0.3 per cent in April, and fell 0.2 per cent over the 12 months to April.

APRA's numbers show a 0.4 per cent fall in credit card balances in April, and a 1.8 per cent fall over the 12 months to April.

According to APRA, almost A$450 million has been wiped off bank credit card balances over the past two years - about 1.25 per cent of total balances.

Bank lending in New Zealand, meanwhile, surged at its fastest rate in five years in April, reinforcing the Reserve Bank of New Zealand's fears about a surge in lending powering a housing boom in Auckland and Christchurch.  

The RBNZ has moved in recent weeks to accelerate plans for macro-prudential controls aimed at slowing mortgage lending growth without having to put up the official cash rate.

Household lending grew by NZ$1.054 billion, or 0.5 per cent over the month in seasonally adjusted terms, to NZ$194.6 billion. It was 4.7 per cent up from a year ago, and annualised lending growth has more than trebled over the last year.