Personal credit growth was extremely low over the year to March 2021, at -11.7 per cent, as consumers took advantage of stimulus payments and record low interest rates to clear debts.
Credit growth across the economy slumped to an extremely low level at just 1 per cent year-on-year.
Annual credit growth has only been lower than that once since the early 1990s recession, during the financial crisis in November 2009.
There was, however, further confirmation that first homebuyers and upgraders are taking advantage of record low mortgage rates to buy property, as monthly housing credit growth increased to 0.54 per cent in March, the highest level since June 2017.
There was a lot of permabear analysis of daily home values when prices were falling, but that seems to have dried up now.
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The bigger picture is that the pulse of housing credit suggests that annual housing price growth will likely accelerate to double-digit levels by around the middle of the year, before probably calming down in the second half of the year as supply responds.
Investors are now returning to the market, but the growth in investor credit remains near record lows as more interest-only loans continue to reset and the stock of IO loans continues to diminish.
Overall, very, very low credit growth across the economy at just 1 per cent, but in my opinion a strong three years likely lies ahead for housing prices.
