Australian Home Lending Now Weakest Since the Mid-1980s
(Bloomberg) -- Australian home lending slowed to the weakest since President Ronald Reagan and Prime Minister Margaret Thatcher dominated the global arena in the 1980s.
Loans to buy houses advanced just 0.2 percent in January from the prior month, according to monthly financial aggregates released by the Reserve Bank in Sydney Thursday. That was the lowest level since July 1984, when Australia was initiating a deregulation campaign to kickstart a moribund economy.
Sydney and Melbourne’s property markets are tumbling as stratospheric prices, tighter lending standards and new supply combine to spook buyers. The RBA, which has kept interest rates at a record-low 1.5 percent for 2-1/2 years to spur economic growth, earlier this month dumped its tightening bias as signs mount that consumers are reining in spending amid falling house prices.
Thursday’s data also showed that credit for personal purchases dropped 2.8 percent from a year earlier -- the weakest annual reading since October 2009.
A separate private release showed rentals in New South Wales fell for the first time in 12 years in response to what the Housing Industry Association described as an “unprecedented volume” of new homes coming online in Australia’s biggest state.
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