Credit demand from businesses and home buyers increased slightly in May to its fastest annual pace since August 2009 even with the consistent climb in loan rates.

Based on the Reserve Bank of Australia's monthly report, total credit grew 0.5 per cent in May to be 2.7 per cent higher than the previous year.

The result concurred with the central bank's third monthly interest rate hike in a row in May, and a sixth increase since October 2009.

The RBA left the cash rate unmoved at 4.5 per cent at its June board meeting. Economists foresee that the central bank will hold fire again in its board meeting on Tuesday.

Business credit climbed 0.4 per cent in May, the biggest step-up since the onset of 2009, although the annual rate was still down 5.6 per cent.

Demand for home loans increased 0.7 per cent in May to be 8.4 per cent stronger over the year, and its biggest movement since September 2008.
Other personal loans, however, fell 0.5 per cent in May to an annual rate of 3.1 per cent.

While housing credit rose, additional data released today indicated new homes sales fell to a three-month low in May.

According to the Housing Industry Association (HIA), new homes sales dropped by a seasonally updated 6.4 per cent to 8,024 units in May after a 6.2 per cent increase the previous month.

Sales of private houses plunged 5.9 per cent in the month while that of multi-units went down 11.6 per cent.