The total value of loans rose to a seven-and-a-half year high in November, spearheaded by a resurgence in business borrowing
Businesses are finally borrowing more, but consumers are still hesitant to take on debt – unless it’s a loan for a home or car.
Total new loans edged up to a seven-and-a-half-year high in November, rising by 1.4%, CommSec chief economist Craig James says.
‘That’s within sight of the record highs set in June 2007,’ he said.
Total lending commitments, which include personal, business, housing and leasing, were also up 20.1% on a year ago.
‘Businesses are finally spending and investing after a period of inactivity,’ Mr James said.
He said companies are taking advantage of the best business borrowing conditions in a generation, with interest rates at the historic low of 2%.
Commercial loans, which include investor housing finance, are up by 23.4% over the year.
‘The lift in lending points to higher spending, investment and thus overall economic activity,’ he said, ‘but consumers are still relatively cautious about taking on debt unless it is a loan to buy property or a new car.’
Housing finance hit a record high of $22 billion in November.
But people are still living within their means, with personal loans falling to the lowest levels in almost nine years in trend terms, Mr James said.
The value of new personal loans rose 0.9% in November to $6.85 billion, according to seasonally adjusted numbers from the Australian Bureau of Statistics.
Commercial loans lifted 1.1% to $45.89 billion, while lease finance slumped 3.9% to $586 million.
AAP
