You guessed it – another record low for housing finance growth

It’s the end of the month again and time for another update from the RBA on private credit aggregates. The trend continues with another all time record low for growth in annual housing credit growth, this time down to just 4.4 per cent.

On a monthly basis, there was no change for owner-occupier housing with growth remaining at a positive 0.3 per cent, but a slight kick up in investor appetite for debt to 0.5 per cent. This caused a monthly rise on overall demand for housing debt to 0.4 per cent.

» Financial Aggregates, January 2013 – The Reserve Bank of Australia, 28th February 2013.

» Annual mortgage growth plumbs fresh lows – MacroBusiness, 28th February 2013.


  1. Like Matty said on the S&P piece. Debt is debt simple. Australia has the highest consumer debt now and it is higher than Europe and the US at their peaks. Yet people are still spending at high levels. Its not going to end well. All the bulls can talk it up all they want but it will not end good. I hear Aussies say well the US, Japan and Europe are going broke because of govt debt. Well Australia your time is coming. All consumer debt will not be serviced at some point especially when the job market gets even worse. Then that debt will have to be rolled into the govt.

  2. @LBS

    Correct! Just like Ireland did.

    Massive unemployment.

    Wealth destruction.

    Dollar collapse.

    30% Interest rates.

    FIAT money is only ever backed by faith.
    Faith that property is worth faith money.
    Faith that government bonds are worth faith money.

    Debt is debt simple.

  3. I came to Australia 9 years ago. Back then I was trying to convince my Aussie friends and relatives that the pace of house price growth is not sustainable and only credit driven. same as the australian economy is debt driven imho

    What does not make sense to me is that this, for two years now declining credit growth chart, is clearly showing that housing finance is in decline but yet various bodies are reporting house price increases. How does this add up. Are there suddenly more people out there paying cash or have high deposits to put forward when they purchase property. Clearly a disconnect.

  4. Just one or two percent higher unemployment over and above the official unemployment rate, which is as phony as any government statistics can be, is all that it’ll take to get the cascade going, according to friends in the RE and finance sectors.

  5. I’d say if you follow the line on this graph, within 12 months house price drops will possibly equal to the low credit rates. You can’t sell your house to someone if they can’t afford the mortgage.
    No one I know has any spare money and certainly are not about to rush out and borrow massive amounts of fake $$$, especially considering the increasing unemployment rates.
    Won’t be long now until it all implodes and yet the government are still allowing too many immigrants to set up camp here. Where are the jobs coming from for all these extra people? Australians need to protest to cut immigration immediately or face the consequences!
    Our citizens deserve a better option rather than overpopulating and causing us to endure a lower standard of living. (No offence to anyone who has already immigrated)
    It’s all unsustainanble!

  6. I work as an Engineer for a large company and things are getting quiet. Others in the business say they have never seen things this bad. When there are few big projects coming through, which started 3-6 months ago then it won’t be too long now before it starts filtering through the system and we see things getting worse. I cannot see how house prices can increase and feel the only way now is down.

  7. Remeber 1 propperty investor can gear more multiple properties to make up for the FHB’s thats why the ponzi can stay inflated.

  8. @ Jane – oh Jane. Have you been reading The Telegraph or watching Channel 9? The first half of your comment is fair and true, but then you go and pull the rug from under it by blaming immigration.

    I think you’re getting immigration confused with welfare. I am an immigrant and I pay more tax here than I did in the UK, plus compulsory super (which I’m not sure I agree with) but I enjoy a better quality of life.

    Believe me it’s bloody difficult and expensive to get into Australia. My 76 year old mother will have to pay $60k to the Australian government and wait two years for a visa that will allow her to spend her last years here with her son and grand-children. She’s devastated – and it has sent her into a deep depression. But does she ‘deserve’ to be with her family? Of course not.

    Nobody ‘deserves’ anything actually. This pervasive sense of entitlement is the root of the problem. We all ‘deserve’ an SUV, we all ‘deserve’ an investment property, we all ‘deserve’ to play golf on the weekends – what utter claptrap! The standard of living in Australia is awesome, probably the best in the world, so I’m sorry, but you’re misguided I’m afraid.

    If Australia is going to compete globally in business, sports and the arts, it must be culturally diverse. Remember Jane, all non-indigenous Australians are immigrants, so where do you draw the line in the proverbial sand when it comes to your definition of ‘immigrant’?

    Over-population is an entirely different matter however. I’ve said so on this forum before and I’ll say it again – if you want to reverse the unsustainability cycle, then stop increasing the global population, not put a plug in the flow of people who are already alive. Immigration is a fact of life, it’s not going to go away, so we should embrace it and change this tiresome and ignorant anti-immigration rhetoric before we all sound like a whining bunch of geriatric racists.

    We could all stop procreating and squeezing out rug-rats though, but we don’t, because we humans are innately egotistical and want to see little versions of ourselves continue the bloodline. A survival instinct if you like.

    We’re ALL to blame for the mess we’re in – and if we want change, we have to change ourselves first!

  9. It is insane when I get the same answer over and over from small and medium size business owners to the question… How’s business? The all say… Mate, we are heading into a recession. I know many business owners who have been in the game for over 50 years, and they know the signs.
    We are heading into a depression / recession. The thing is a majority of people are blissfully unaware. They are almost deliriously optimistic.
    So many people dumbed down from TV, government propaganda and the city papers. This boom was unsustainable. How can anyone with half a brain not see that?
    Watch as the ship sinks… Women and children first!
    We build manufacture nothing in Australia but shallow idiots that buy overpriced houses, drive SUV`s they cannot afford and live lifestyles way over their budget just to keep up with the Jones’.
    I just wish we could export them. Any county for a few million trendy soulless wankers?

  10. Also, love your site. I try to put people onto it but most seem to be more interested in then release date of the iPhone 5, or worried about if their SUV is up to date enough. Oh dear, we are really scraping the bottom of the gene pool nowadays.

  11. @Jane
    Immigrants ‘setting up camp’ here have a great deal to offer Australia. The are exceptions but generally there are strict requirements on the granting of permanent residency visas. These requirements often include the applicant providing substantial sums of money for investment in Australia. They are generally very well educated people, are very well informed and are living in the twenty first century with attitudes to match. They are industrious articulate and productive. They do not view the world through the rear view mirror.
    What is unsustainable are ignorant, insular, archaic emotive attitudes with no basis in fact

  12. @Jane

    there are three kinds of immigrations come to Australia – the poor, the rich and the well-educated .

    the poor: they do the dirty, hard, low-paid jobs no OZs or YOU would do.

    the rich: they bring tons of $ into this country. spend a lot, pay a lot tax, build up business, give people like you JOBs.

    the well-educated: they do the high tech jobs no OZs or YOU can do. they pay a lot of tax and supers, and pay a lot more for everything than where they come from. only because people like YOU can get overpaid and get tons of benefits from tax money.

  13. Guy’s, sorry but I didn’t say Stop I said Cut. Which I will clarify for you, I am happy to have a multicultural society and am more than obliging/welcoming of skilled people making a contribution. I don’t consider myself ignorant on these topics, I have a good understanding of the process and costs involved, having had a good friend move here last year.
    My main irk is probably the trans tasman agreement, 50k last year just arrived on our doorstep no questions asked.

  14. @ Rupert, absolutely we live in a reasonably lucky, fortunate country. However, I am old enough to have lived through quite a number of decades and our standard of living compared to say the 70’s 80’s and even 90’s is slowly deteriorating. It used to be a much better place to live in many ways.
    Please don’t take any offence to my posts, I’m not directing my views personally at you or anyone else who may read this blog. Sometimes, I tend to rant on a bit too much and not make my point clearly enough. Cheers 🙂


    All you regulars please check out this site.. It’s based on the rediculous events in the Vancouver real estate market. Similar market to Sydney outrageous prices all time low interest rates, greedy realtors fueling the bubble. Realtors are using the HAM (Hot Asian Money) tactic. They are claiming cashed up Asians are buying up everything and regular folks better buy now or they are out of luck. Turns out the HAM is a con. Realtors are using marketing companies to use Chinese actors to show up at open houses and line up at new developments so it appears that HAM is out here.

    Google MAC marketing Vancouver fake investors to read up.

    Don’t believe the media they print and air whatever dribble realtors are feeding them. Certainly do not believe realtors. Vancouver’s bubble is deflating, Sydney will soon follow.

  16. @Jane – I don’t take anything personally, don’t worry about that. I love your rants 😉

    While I agree that the good old days of the 70s, 80s and 90s were better in many ways, there were equally worse in many ways too. Things change – some for better, some for worse. Finding someone or something to blame for those changes is a pointless exercise. You’ve just got to go with the flow. That’s living!

    Regarding the Trans-Tasman Agreement, it’s equally difficult to get into New Zealand, so if last year 50,000 NZ residents came to live and work in Australia – good luck to them I say. I’m sure you’re aware that in 2001 the agreement was amended to stop entitlements to unemployment benefits. It’s a also a two-way agreement, let’s not forget, so Australian residents can go and live and work in New Zealand too, with no questions asked. What’s wrong with that?

  17. @ DV That is SHOCKING! If it’s true (and I hope it is), then heads will roll. Surely it’s illegal – and if these Asian ‘actors’ are shill bidding too, then something needs to be done.

    Isn’t it about time governments enforce strict regulations on these unlicensed and untrained ‘salesmen’ in the real-estate sector? Lobby your MP today!

  18. Rupert – good, I’m glad. (giggles)

    Believe me, I know how to go with the flow, after having endured many challenges in life and recently being diagnosed with cancer (melanoma for the 2nd time) Too much sun tanning when I was a teenager…I am paying the price now. So, I understand what you are saying.

    Usually, I am a fairly easy going, tolerant person, however certain situations that I see as important issues or govenment policies that I feel are failing and need improving, I will speak up about. People can either agree or disagree with my point of view.

    Yes, I am aware of the changes in 2001, because it was being rorted by the NZD’s, mainly coming here to get a free education, racking up huge HECS debts then disappearing. So the changes needed to happen! The issue I have with the agreement is there are 10 times more ND’ers coming here than Australians moving there, if this continues New Zealand will have no one left.
    Immigration rules need to be the same for everyone, no special treatment for neighbours and nor should Australians expect special treatment when immigrating to other countries around the world.

    I could go on but I think i’ll shut up now, the issues are complex, however, I stand by my view that population growth via-immigration causes economic and social issues. Too many people = too much competion for everything. It needs to be sustainable and fair for everyone.
    No use allowing people to move here when the economy/job market is shrinking.
    If you are interested, here’s a link on the pros and cons of immigration.

  19. I would really like to see a chart of total population increase per year for the last 20 years (LHS) plotted against total number of dwellings in Australia created each year(with the scale adjusted to 2.5x to represent number of people per house) This would dispel any ideas about our reported undersupply of houses.

  20. To some extent, I would agree with Jane. I think all would agree that the ecosystems that support our big island nation are failing us,as you would expect, considering how much we have abused them. We are no longer living off the interest, but the capital of this nation. I would suggest we tread carefully or we will overrun our carrying capacity. Not that immigration is a bad thing if done well.

  21. The scam involving the Chinese sisters looking for property in Canada can be read here.

    Also, have a read from Garth Turner about how the RE Cartel convinced people in Vancouver that the HAM was on its way. All it did was push up prices from $800K to $1.2M in 4 years. All they did was create fear and anxiety in Canadians that they would be priced out of the property market forever. It simply wasn’t true.

    This scam in Australia is doing exactly the same thing. It’s designed to create fear that the Chinese are going to buy up everything to the point Australians will miss out unless they act now.

    Remember – all these people in the promotion have a vested interest in what they sell. The only missing piece of the puzzle is …. you.

  22. Some really interesting comments here. I have to say that I agree with most of the guys who state that a credit-driven economy is bound to come tumbling down after a while. The housing market boom is also all smoke and mirrors given that most contractors borrow to build. What’s going to happen when there’s a lot of expensive real estate and no-one to afford them? I think that Australia is staring down a barrel that’s about to go off any time now.

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