Demand for loans in Australia recorded growth in May, new figures from the Reserve Bank of Australia reveal.
In terms of value, credits provided to home buyers advanced by 0.4% in May compared with the previous month, after seeing similar increases in April, March and February. The slight uptick in housing loans brought the annual improvement rate to 4.5%, which is still above the record-low level of 4.4% registered in January.
The latest official report from the country’s central bank also shows that the total value of loans granted to Australia’s private sector went up by 0.3% last month. The segment scored an identical monthly increase of 0.3% in April. At the same time, the value of other types of personal credit slipped by 0.1%, which took the annual decline rate for the segment to 0.2%.
Credits provided to businesses edged up by 0.1% in May after seeing a 0.2% lift in April. Year-on-year, corporate lending increased by 0.9%.
Commenting on the figures, Shane Garett, an economist at the Housing Industry Association, said that the modest increase in loan values was a result of RBA’s introduction of several reductions to interest rates so far in 2013. Garett, however, believes that credit growth remains subdued as banks are still reluctant to lend. They are chiefly concentrated on measures to foster their balance sheets in order to ensure both their long-term financial viability and compliance with regulatory standards.