Slower property lending may ease way for further rate cut by Reserve Bank
|21/09/2019||Posted by admin under 南京夜网||
A slower pace of lending to property investors in February has given the Reserve Bank of Australia more scope to cut interest rates without adding further fuel to overheated housing markets in Sydney and Melbourne.
The central bank said on Tuesday that the value of credit provided to buy-to-let and buy-to-sell investors expanded by 0.7 per cent month-on-month in February, compared with growth of 0.8 to 0.9 per cent for the previous 10 months.
For the 12 months to the end of February 2015, however, accumulated growth was 10.1 per cent, unchanged from January and compared with 10 per cent at the end of 2014.
Total mortgage lending in February expanded 0.5 per cent, compared with 0.6 per cent in the preceding six months.
However, for the 12 months to the end of February, growth was 7.2 per cent, against 7.1 per cent at the end of both January 2015 and December 2014.
Total credit growth for the month came in at 0.5 per cent, in line with market expectations. Year-on-year expansion was 6.2 per cent, slightly below expectations but above the revised 6.1 per cent seen at the end of January.
The central bank is almost certain to cut the cash rate another 25 basis points, to 2 per cent, either next week or in May in a further attempt to stimulate non-mining investment.
The RBA eased monetary policy for the first time in 18 months in February, and indicated further cuts would be necessary to help the flagging economy rebalance away from resource infrastructure investment.
Bets are also rising that a third cut for the year may also be warranted, as the sharp drop in commodity prices undermines residual investment plans in the sector and hits Australia’s fiscal accounts.
Sluggish business investment and consumer spending is also holding back growth, and could help push the unemployment rate towards 7 per cent.
According to Tuesday’s aggregate credit data, the value of personal loans shrank 0.3 per cent in February, while business lending growth also slowed, from 0.8 per cent in January to 0.6 per cent.
“Regardless of whether the RBA cuts interest rates from the current rate of 2.25 per cent to 2.00 per cent at the April or May policy meeting (we slightly favour a move at the meeting on April 7), the main point is that this is unlikely to mark the end of the loosening cycle,” economists with Capital Economics told clients.
“Our forecast that the RBA will reduce rates to 1.5 per cent by the end of this year incorporates more cuts than the markets currently expect.”
The Australia dollar was largely unchanged, around US76.60¢ after the data’s release.
This story Administrator ready to work first appeared on Nanjing Night Net.