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ISCOVER
Staff Reporter
There has been a dramatic shift in the way Australian households and businesses are banking since the global financial crisis, according to RateCity.
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Damian Smith, RateCity's chief executive, said we have the slowest increase in overall borrowing for the last seven years.
"Household borrowing grew from $832 billion in August 2005 to $1.3 trillion in August 2011; but the growth in the last 12 months has been just 5 per cent or $66 billion, the slowest growth since 2005,” Mr Smith said.
"The slowdown in business borrowing has been even more pronounced – in fact, we’ve had negative growth over the last 3 years.
"Businesses had $65 billion less of debt in August 2011 compared to August 2008. This not only reflects the fact that many small-to-medium enterprises haven’t been able to get access to credit since the onset of the GFC – it shows that many businesses have been actively reducing debt, either by paying it down or by raising equity," he said.
By contrast, RateCity research revealed unprecedented increases in deposits by both households and especially businesses.
"Households added over $190 billion of deposits in the last three years, compared to just over $110 billion for the three years preceding that.”
