Housing finance slides in January, as credit cards decline

ABS figures show housing finance tumbled further in January, while the number of credit card accounts continues to fall, according to the RBA. 

Housing finance 

The ABS Lending to Households and Business figures show the total value of new lending to households dropped 20.6 per cent from January 2018 to January 2019, in seasonally adjusted terms and excluding refinancing.

Paul Marshall, CEO of RateCity.com.au, said loans to investors took the biggest hit in January as the housing market drops further.

“The investor exodus from the housing market has continued, with the number of new investor loans falling 28.6 per cent in the last year,” he said.

“The value of new investor loans dropped to the lowest level since October 2011, with $1.87 billion ripped out of the market since last year.

“Loans to owner occupiers also fell significantly year-on-year, down 17.1 per cent in January.

“We’re in a climate where lenders are throwing everything at new customers to get them through the door, by slashing rates and offering big sign-up bonuses in an effort to win market share.”

Value of new loans % change from previous month % change year on year
Owner occupiers -1.3% -17.1%
Investors -4.1% -28.6%
All loans -2.1% -20.6%

Source: ABS lending to households and businesses statistics for January 2019, released 12 March 2019. Seasonally adjusted figures. Figures exclude refinancing.


Credit cards 

Also released today, the RBA’s credit card statistics show the number of credit card accounts continued to drop, as did total credit card limits.

“Strict new credit card regulations are making it harder for people to get a credit card and as a result the number of credit card accounts dropped to the lowest level since February 2015,” said Marshall.

However, balances accruing interest rose to $31.71 billion in January, as the value of repayments fell.

“January can be a tough month for families as the costly festive season comes to an end and bills pile up, and the figures show that this year has been no exception.

“The number of cash advances also increased in January as more people turned to credit to get them through.”

Value Monthly change Year on year change
Number of accounts 15,890,109 accounts Down by 23,048 accounts Down by 821,054 accounts
Balances accruing interest $31.71 billion Up $313.15 million Down $885.93 million
Total credit limits $151.41 billion Down $245.97 million Down $1.68 billion

Source: RBA credit card statistics for January 2019, released 12 March 2019.

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