More evidence yesterday that the economy is starting to tick over a bit more quickly.
Private lending figures from the Reserve Bank showed credit continued to rise in February, while new home sales in February hit a new three year high, according to the Housing Industry Association.
The news won’t have any real impact on the RBA board’s deliberations today on interest rates – they are on hold for a while yet.
And not one of the 13 economists surveyed by AAP yesterday predicts a rate rise from today’s RBA board meeting.
But the credit and housing figures will help confirm the bank’s belief that the pace of activity in the economy is continuing to improve, driven by home lending finance and construction.
The RBA data for February showed that lending to business remains weak and is running at just under the annual growth rate in the economy of around 2.8%, while home lending is running well above GDP growth and closer to 5%.
The RBA said total credit rose 0.4% in February (after seasonal adjustment), unchanged from January’s pace.
Annual growth came in at 4.3%, up from 3.4% in the year to February 2013 and 4.1% in the year to January.
In the six months to February, the growth rate was 4.7% on an annualised basis.
In the six months before that, total credit rose 3.8%, up from 2.8% in the six months before that.
Over the December – February period the annual rate hit 5.2%, the strongest for some time.
Lending for housing was up by 0.5% in February and by 5.8% over the year, up from 4.4% in the year to February 2013.
But in the three months to February this year, home lending was running at an annual rate of 6.8% as the pace of lending by banks and other groups accelerates.
Other personal credit fell by 0.2% to be up by only 0.7% from a year before after edging up by 0.1% In January.
Over the year to February, personal credit was up 0.7%, compared with a fall of 0.2% in the 12 months to February 2013.
Business credit was up by 0.4% for the month and 2.4% for the year (and 2.5% for the year to February 2013), after rising by only 0.2% in January.
Meanwhile the Housing Industry Association (HIA) said new homes sales jumped in February thanks to strong demand for detached houses.
The Association said its survey of large builders showed sales of new homes rose 4.6% in February from January, to their highest level in almost three years.
Sales of new detached houses were the driver, up by just on 7%, just offsetting a 6.8% fall in sales of units, townhouses and apartments.
New home sales reach near three-year high
"Both sales and building approvals for detached housing are signalling faster momentum ahead for this component of new dwelling construction, compared to what was evident in the first phase of the recovery," HIA chief economist Harley Dale said in a statement yesterday.
"This signal suggests more balanced growth ahead in the composition of new home building and adds a further positive dimension to the recovery for many of Australia’s manufacturers and suppliers."
Queensland led the way with sales of detached houses jumping 17.5% in February, followed by a 9.3% rise in Western Australia, one of 8.8% in Victoria and just 1.9% in NSW (where sales were at much higher levels late last year).
Sales in South Australia fell 10.7%, but HIA figures show there has still been strong growth in that state over the past quarter of more than 30%.
