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Lending lifts; Top tourist destinationsLending finance; Overseas arrivals & departures
Lending finance: Total new lending commitments (housing, personal, commercial and lease finance) rose by 9.5 per cent in November – the biggest rise in almost three years and to a 12-month high.
Tourism: Tourist arrivals rose 0.4 per cent in November to be up 8 per cent on the year. Tourist departures rose by 0.4 per cent in the month to be up 6.3 per cent on the year.
Record Chinese tourists: Over the past year a record 1,373,000 tourists came to Australia from China, up 12.7 per cent over the year. Tourists from New Zealand totalled 1,360,300 visitors over the past year, but were up just 1.9 per cent.
Top tourist destinations: The fastest growing markets for Aussie tourists include Croatia, Israel, Greece, Canada and Spain. 
What does it all mean?
There are signs that Aussies again want to borrow. But we won’t be convinced until we see more evidence. Lending has lifted in the past, only to retreat in following months. Aussies still maintain a conservative attitude in terms of taking on more debt.
More tourists are coming ‘Down Under’ and more Aussies are travelling abroad. So for airlines, airports, accommodation and other travel-related businesses, the business environment remains favourable.
In a net sense, around a quarter of a million migrants are coming to Australia every year. Around three quarters of a million people are recorded as permanent or long-term arrivals to Australia. At the same time around a quarter of a million Aussies each year choose to live or work overseas for an extended period. The consistent growth of migrants to Australia is important for a raft of industries including housing and consumer spending.
The current ‘hot’ destination for Aussie tourists is Croatia. In the year to November 2017, 38,700 Aussies visited Croatia, a lift of more than 50 per cent over the previous year. Other fast-growing tourist destinations include Israel, Greece, Canada and Spain.
What do the figures show?
Lending Finance:
Total new lending commitments (housing, personal, commercial and lease finance) rose by 9.5 per cent in November – the biggest rise in almost three years and to a 12-month high of $74.2 billion.
In trend terms, lending rose for the third straight month, up by 0.4 per cent in November.
Personal finance commitments rose by 1.1 per cent in November – the seventh consecutive monthly increase. Fixed lending rose by 0.1 per cent. Revolving credit was up by 2.8 per cent. Personal loans are still down 6.0 per cent on a year ago.
Within fixed lending, loans to buy blocks of land hit a fresh record high of $8.05 billion for the year to November.
All housing finance rose by 2.5 per cent in November with construction and purchases up 2.7 per cent. Alterations and additions fell by 5.0 per cent but were up 2.6 per cent over the year. All housing finance is up 6.8 per cent over the year.
Commercial finance rose by 14.7 per cent in November after falling 8 per cent in the two previous months. Within commercial commitments, fixed lending rose by 22 per cent while revolving credit fell by 8.1 per cent. Commercial loans are still down by 6.9 per cent on a year ago.
Lease finance fell by 8.0 per cent in November after a rise of 4.1 per cent in October to stand 1.2 per cent higher over the year.
Overseas arrivals & departures
Tourist arrivals rose by 0.4 per cent in November to 760,300, just below the record high of 761,400 in August. Short-term resident returns (Aussies returning from holidays overseas) rose by 0.4 per cent to 892,000, just below the record high of 893,600 in May.
In November, tourists from Greater China (China and Hong Kong) totalled 141,100 (mainland China 115,800; Hong Kong 25,300), ahead of New Zealand (116,000).
In annual terms, China is the largest source of tourists to Australia. Over the past year a record 1,373,000 tourists came to Australia from China, up 12.7 per cent over the year. Tourists from New Zealand totalled 1,360,300 visitors over the past year, but were up just 1.9 per cent.
In the year to November, the number of permanent and long-term arrivals to Australia totalled 778,610 while permanent and long-term departures totalled 509,050. The net migration of 269,560 was the lowest in ten months but off the recent low of 240,680 in the year to January 2016. The record high of 353,480 was set in the year to April 2009.
What is the importance of the economic data?
Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
The Australian Bureau of Statistics releases data on overseas arrivals and departures is produced monthly and is an indicator of the health of the tourism sector. The figures are also useful in understanding spending trends and tracking migrant numbers – an indicator with widespread implications for employment, housing and spending.
What are the implications for interest rates and investors?
Businesses are doing well at present, and it’s not just because Aussie consumers are spending. The constant flow of tourists to Australia is important for a raft of businesses as well as spending by Aussie businesses themselves, spending by governments and demand for Australian goods and services from abroad. Retail spending is becoming a smaller proportion of total spending given widening sources of consumption.
Tourism-dependent businesses are well supported in the current healthy market conditions.
CommSec expects rates to remain on hold until late 2018.
Originally published by Craig James, Chief Economist, CommSec