Strong Lending

Positive finance figures from August lend support to RBA move. Total new lending commitments (housing, personal, commercial and lease finance) rose by 2.8 per cent in August. In annual terms lending is now up 10.2 per cent on a year ago – marking the best annual growth rate in 19 months.

Personal lending rose by 4.1 per cent in August to be up 15.1 per cent on a year ago – marking the best reading in over two years. Vacant blocks of land continue to be snapped up with sales up 60.1 per cent on a year ago.

The signs are therefore clear that businesses and consumers are starting to borrow again meaning that will flow through into spending soon. Keep an eye on these numbers over the next few months to see if the borrowing stops now that the 3% cash rate bonanza has ended.