Stronger housing credit among owner-occupiers is reinforcing the concern of Australia's financial regulators, who are considering policies to curb activity before debt-laden households become a risk to the economy.
Record low interest rates have seen borrowers chasing ever-increasing house prices, which has propelled owner-occupier housing debt to its highest annual pace since October 2016.
The Reserve Bank of Australia said owner-occupier housing credit grew by a further 0.8 per cent in August to an annual rate of 8.4 per cent.
AMP Capital Markets chief economist Shane Oliver said housing credit remains very strong and well above household income growth.
He said housing debt continues to run above seven per cent and at a pace when the Australian Prudential Regulatory Authority first moved to tighten lending standards in 2014.
"While it's coming a bit later than we expected ... APRA now looks likely to use macroprudential controls to slow down housing lending growth from later this year," Dr Oliver said.
APRA plans to soon publish an information paper on its framework for implementing such policies.
Overall housing credit, including investors, was up 0.6 per cent to 6.2 per cent for the year.
Credit more broadly, taking in housing, business and personal loans, rose 0.6 per cent to be 4.7 per cent up over the year.
Separate figures showed building approvals unexpectedly rose 6.8 per cent in August to 18,716.
Economists had expected a further five per cent decline in the month.
Approvals for detached housing rose 3.5 per cent to 12,009, while excluding houses, approvals jumped 13.7 per cent to 6453, the Australia Bureau of Statistics said.
ABS director of construction statistics Daniel Rossi said approvals for detached housing remains strong despite the unwinding of the HomeBuilder program and ongoing lockdowns in NSW and Victoria.
"Driven by record low interest rates, increased household savings and confidence in the housing market, private house approvals are 23.8 per cent higher year-on-year and 42 per cent higher than August 2019," he said.
Separately, the ABS said job vacancies tumbled by 9.8 per cent between May and August, but are still 46 per cent higher since the start of the coronavirus pandemic.
ABS head of labour statistics Bjorn Jarvis said the fall in job vacancies coincided with lockdowns in NSW, Victoria and the ACT, and followed earlier shutdowns in Queensland and South Australia.
"It was the first drop in vacancies since May 2020, during the initial wave of COVID-related lockdowns and restrictions," Mr Jarvis said.
National Australia Bank economist Taylor Nugent said the decline was relatively mild when compared to the 43.3 per cent drop in the middle of last year.
"Labour demand remains resilient and supports expectations for a strong recovery once lockdown restrictions ease," Mr Nugent said.
Australian Associated Press
