(1 June 2009 – Australia) The latest RBA results show that housing credit is the only form of credit to increase in April, pushing total private lending by financial institutions up by 0.1 percent.For the third straight month total credit increased by the smallest of margins; at 0.1 percent, on the back of a solid in housing credit.
Housing credit has been buoyed, in particular, by the extension of the increased first home owner grant.
While credit overall has only fallen once in the past three years, other forms of credit have fallen consistently.
Other personal credit fell by 0.3 percent, the thirteenth straight month of decreases. The RBA said that the falls in other personal credit were largely to do with a large decline in margin lending in Australia.
The biggest fall, however, came in business credit, which fell by 0.5 percent over the month of April. Over the year, business credit has grown by just 3.5 percent, compared to a massive 19.5 percent year on year increase to the same month in 2008.
The RBA pointed to falls in foreign currency denominated lending to explain the decline in business credit.
East & Partners research suggests that rising interest rates on business credit have made debt increasingly hard to come by, particularly for small businesses.