Credit growth supercharged in June

A late rush by a minority of households and business owners to tip as much as $1 million per person into superannuation ahead of the June 30 deadline for the transition to Australia's new lower-tax super system has - as expected - pushed the rate of credit growth radically higher during June.

The monthly data published yesterday by the Reserve Bank of Australia shows the extent of the credit surge and the identity of the lenders who enjoyed an above average share of this surge.

Overall credit growth increased by 1.8 per cent in June 2007, up from an increase of 1.3 per cent in May. Over the 12 months to June 2007 credit growth increased to 15.4 per cent, up from 14.5 per cent in the 12 months to May.

Housing credit increased by 1.5 per cent in June (still a lower rate of growth than at the height of the 2003 credit boom) and increased by 13.2 per cent in the year to June, a level that is still lower than the rate of growth for this segment over late 2006 and early 2007.

Other personal credit increased by 3.6 per cent in June (which may be the highest rate of growth for this residual measure in any month) and increased by 15.3 per cent in the year to June, up from a growth rate of around 12 per cent recently.

Business credit increased by 1.9 per cent in June, up from 1.5 per cent in May  The 12-month growth rate increased to 18.7 per cent from 17.3 per cent.