ABS figures out today show a dramatic drop in new housing loans, while the number of credit cards are also continuing to fall, according to the RBA.
The new ABS Lending to Households and Business figures show the total value of new lending to households dropped 19.8 per cent from December 2017 to December 2018, in seasonally adjusted terms and excluding refinancing.
Sally Tindall, research director at RateCity.com.au said it was interesting that owner-occupiers took the biggest hit this month.
“New lending to owner occupiers fell the most this month, with a 6.4 per cent drop, compared to investors who fell just 4.6 per cent.
“Looking at the bigger picture however, investors are still leading the retreat from the market, with a 27.8 per cent drop in new loans compared to the year before.
Value of new loans
% change month on month
% change year on year
Notes: Seasonally adjusted figures. Figures exclude refinancing.
Source: ABS lending to households and businesses statistics for December 2018, released 12 Feb 2019.
Also released today, the RBA’s credit card statistics show the number of active credit card accounts dropped to 15.91 million in December 2018, making it the lowest number of credit card accounts since February 2015.
Credit card limits also fell since December 2017, down 0.71 per cent year-on-year.
“Today’s figures confirm that our reliance on credit cards is starting to wane as alternatives such as Afterpay become a more attractive alternative, particularly among younger Australians.
“We expect to see these figures to drop even further in 2019 when the new credit card regulations come into play, which are designed to stop people from taking out cards they can’t afford to repay.
While the number of credit cards has fallen, the value of purchases was up 3.5 per cent year on year in December, according to the RBA figures.
“The good news is Australians are making higher repayments and as a result the total debt accruing interest is coming off the boil,” she said.
Year on year change
Number of accounts
Down by 60,009 accounts
Down by 781,438 accounts
Balances accruing interest
Down $122.9 million
Down $374.9 million
Total credit limits
Down $276.4 million
Down $1.08 billion
Source: RBA credit card statistics for December 2018, released 12 Feb 2019.