RBA statistics for May provide little hint of a pick-up in lending as credit for mortgages increased 0.2 per cent after a rise of 0.3 per cent in April.
The first official data on lending since the country's federal election suggests the pace of credit growth continued to slow during May as finance for property investors hit an unprecedented annual low.
Lending to businesses and property buyers grew only marginally in May, while the fall in personal loans accelerated, statistics from the central bank suggest.
The numbers show overall private sector credit grew 0.2 per cent - meeting market expectations and equalling April's result - and that mortgage credit growth slowed to 0.2 per cent in May from the previous month's 0.3 per cent, while credit to business rose 0.1 per cent and personal credit fell 0.6 per cent.
The financial aggregates data released by the Reserve Bank of Australia on Friday indicated the pace of overall credit slowed to 3.6 per cent over the past year, below market expectations of 3.7 per cent.
Housing credit grew 3.7 per cent in the 12 months to May - the slowest annual growth rate since records started in 1976 - while business credit gained 4.5 per cent and personal credit fell 3.2 per cent.
Loans to property investors remained flat for the fifth consecutive month, also reaching an all-time low, edging up just 0.5 per cent over the past year.
Owner-occupier credit grew 0.3 per cent in May compared to the previous month, with the 5.3 per cent annual increase the weakest since June 2015.
The figures are the first official statistics on lending since the ruling coalition's surprise federal election win on May 18.
Economists said the stalling rate of credit for property investors was a result of the group being the most strongly affected by the fall in home values, tighter bank lending restrictions and reduced access to refinancing.
But commentators differed on whether the pace of lending would pick up in a major way after the loosening of some financing constraints announced in recent months and the prospect of further interest rate cuts by the RBA.
"Although a disappointing monthly result for housing credit, we still see housing credit improving later this year as the impacts of further anticipated rate cuts and changes to the mortgage affordability floor start to have an effect," ANZ researchers Hayden Dimes and Richard Yetsenga said.
"In our view, housing credit is stabilising at low levels, but we don't expect an acceleration following APRA's easing of interest servicing buffers, given the distribution of buyers satisfying all relevant lending criteria hasn't changed," JP Morgan analyst Ben K Jarman said.
CommSec economist Craig James put the overall slump in lending for property buying down to "low inflation, lower home prices, an investor strike and competition from other asset classes".
Business credit in May had a slight increase on the flat result of April and meant the 12-month pace remained at 4.5 per cent.
St George economist Janu Chan said the almost complete lack of growth in credit to companies in the past two months likely reflected a loss of momentum in the broader economy.
"A deterioration in business conditions since the middle of last year appears to be now translating into softer growth in credit," Ms Chan said.
Westpac analyst Andrew Hanlan said the level of lending to businesses was volatile and the strong pace in credit in the latter part of last year was likely underpinned by mergers and acquisitions activity at the time.
The monthly drop in personal credit - households' borrowing for purchases other than real estate - was an acceleration from the 0.3 dip in April and pushed the annual movement to a nine and a half year low.