Across 12 months to December 2021, credit growth hit 7.2% recording its strongest annual growth in 13 years according to RBA data.
This result surpasses the four-year high reported from October.
Westpac Senior Economist Andrew Hanlan said credit growth had not reached these heights since November 2008, prior to the impact of the GFC.
"This represents a dramatic acceleration from the anaemic 1.7% increase in 2020," Mr Hanlan said.
Twelve-month housing credit grew to 7.4% in December, with owner-occupiers leading the charge recording an annual growth of 9.6% - again the strongest annual result since 2008.
For investors, twelve-month housing credit recorded annual growth of 3.4%.
Mr Hanlan said the housing sector has been in a brisk upswing, punctuated at times by lockdowns.
"This strength is in response to record low rates, the HomeBuilder program and a switch in demand as folk looked for more space at home," he said.
CommBank Senior Economist Belinda Allen said the recent rise in fixed rate loans for both owner-occupiers and investors as well as the growing expectations of official cash rate rises in 2022 should weigh on housing credit growth in the period ahead.
Personal credit falls
Personal credit fell by 0.8% in December and remains 3.8% below levels a year ago.
The fall in December comes after 0.6% gains were recorded in November.
Ms Allen said although lending has lifted for holidays and cars in CBA lending data, households as a group have a significant pool of savings which has reduced the need to borrow.
"At this stage CBA card spend data has been encouraging during the Omicron outbreak, save the first two weeks of January but a degree of uncertainty could creep in for big ticket items that often require loans like cars, applications or holidays," she said.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
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| Variable | More details | ||||||||||||
| FEATUREDUNLIMITED REDRAWSSPECIAL OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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| Variable | More details | ||||||||||||
| FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES | Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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| Variable | More details | ||||||||||||
| QLD/NSW/VIC/SA METRO & INNER REGIONAL AREAS | Variable Home Loan (Principal and Interest)
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Variable Home Loan (Principal and Interest)
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| Variable | More details | ||||||||||||
| REFINANCE ONLY | Variable Rate Home Loan – Refinance Only
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Variable Rate Home Loan – Refinance Only
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| Variable | More details | ||||||||||||
| NO ONGOING FEESFREE REDRAW FACILITY | Live-in Variable Loan (Principal and Interest) (LVR < 90%)
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Live-in Variable Loan (Principal and Interest) (LVR < 90%)
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- Fast turnaround times, can meet 30-day settlement
- For purchase and refinance, min 20% deposit
- No ongoing or monthly fees, add offset for 0.10%
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 29, 2022. View disclaimer.
Image by Qimono via Pixabay.
