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Housing finance tumbles in December, credit cards continue to fall out of favour

Housing finance tumbles in December, credit cards continue to fall out of favour

12 Feb, 2019 - 3 min read

ABS figures out today show a dramatic drop in new housing loans, while the number of credit cards are also continuing to fall, according to the RBA.

Housing finance

The new ABS Lending to Households and Business figures show the total value of new lending to households dropped 19.8 per cent from December 2017 to December 2018, in seasonally adjusted terms and excluding refinancing.

Sally Tindall, research director at RateCity.com.au said it was interesting that owner-occupiers took the biggest hit this month.

“New lending to owner occupiers fell the most this month, with a 6.4 per cent drop, compared to investors who fell just 4.6 per cent.

“Looking at the bigger picture however, investors are still leading the retreat from the market, with a 27.8 per cent drop in new loans compared to the year before.

Value of new loans	% change month on month	% change year on year
Owner occupiers	-6.4%	-16.2%
Investors	-4.6%	-27.8%
All loans	-5.9%	-19.8%

Notes: Seasonally adjusted figures. Figures exclude refinancing.

Source: ABS lending to households and businesses statistics for December 2018, released 12 Feb 2019.

Credit cards

Also released today, the RBA’s credit card statistics show the number of active credit card accounts dropped to 15.91 million in December 2018, making it the lowest number of credit card accounts since February 2015.

Credit card limits also fell since December 2017, down 0.71 per cent year-on-year.

“Today’s figures confirm that our reliance on credit cards is starting to wane as alternatives such as Afterpay become a more attractive alternative, particularly among younger Australians.

“We expect to see these figures to drop even further in 2019 when the new credit card regulations come into play, which are designed to stop people from taking out cards they can’t afford to repay.

While the number of credit cards has fallen, the value of purchases was up 3.5 per cent year on year in December, according to the RBA figures.

“The good news is Australians are making higher repayments and as a result the total debt accruing interest is coming off the boil,” she said.

	Value	Monthly change	Year on year change
Number of accounts	15,913,157 accounts	Down by 60,009 accounts	Down by 781,438 accounts
Balances accruing interest	$31.40 billion	Down $122.9 million	Down $374.9 million
Total credit limits	$151.66 billion	Down $276.4 million	Down $1.08 billion

Source: RBA credit card statistics for December 2018, released 12 Feb 2019.

Disclaimer

This article is over two years old, last updated on February 12, 2019. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

Laine Gordon

Money Editor

Laine Gordon is the Money Editor at RateCity and an experienced journalist and research specialist. With a background in news and feature writing, covering finance, media and even food (a passion of hers) at Reed Elsevier publications, Laine brings almost two decades of experience to the team. Having covered major areas of interest to the general public from hip pocket issues to rising and falling interest rates and the impact to mortgages, credit and saving in Australia, she is passionate about researching and telling people’s stories to help others make better decisions about their own finances.