Credit growth remained feeble over 2011, Reserve Bank figures show.
The total amount households, farmers and businesses owe their banks rose by $3 billion, or just 1 per cent, in the year.
Households remained wary of debt. Annual growth in mortgage debt in December at 1.2 per cent was down from 1.8 per cent a year earlier and 3.5 per cent in December 2009. Consumer debt fell 0.3 per cent.
By contrast turnover in the housing market in December was 21 per cent higher than a year earlier, according to the Real Estate Institute, though still 30 per cent below the December average between 2003 and 2007.
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Infometrics economist Matt Nolan said it appeared households had been trading houses among themselves rather than using mortgage money to buy new builds or consumer goods.
That was consistent with both weak retail spending and the low level of residential building, he said.
At the end of the year 60 per cent of mortgage debt was on floating rates, which averaged 5.74 per cent, Reserve Bank data show. Most of the rest was on fixed-rate loans maturing in less than two years.
A year earlier only 46 per cent was on floating rates, which averaged 6.26 per cent.
Meanwhile, farmers appear to have been funding expenditure out of cashflow. Farm debt, which had quadrupled over the 2000s, shrank 0.5 per cent last year.
But business borrowing picked up, rising 1.7 per cent, after contracting 2.5 per cent in 2010 and 8 per cent in 2009.
"Although this increase is encouraging ... both investment and borrowing have fallen sharply in recent years and remain at a very low level," Nolan said.