Oz hammered by hikes
The house price boom in Perth is ‘unraveling’ as rate hikes scare off buyers…
Figures released recently by the Australian Bureau of Statistics (ABS) show the housing lending downturn is being felt around the country, but has hit hardest in Perth, where the house price boom of the past three years is unravelling.
BT Financial Group chief economist Chris Caton, commented: "New mortgage approvals for established homes have also suffered their biggest dive in seven years as rising interest rates scare off buyers, providing fresh evidence that the Reserve Bank's campaign against inflation has begun to slow the economy.
Rapid downturn
The rapid downturn in home lending - which came before the last 0.25percentage point rate rise in March - rules out a further rise in interest rates at the Reserve Bank's pre-budget board meeting next month and may signal that rates are on hold for the foreseeable future.
Mr Caton added: “Although it’s too soon to be contemplating interest rate cuts, the weak housing figures have raised that possibility. Housing figures are one more piece of evidence that rate rises are getting some traction and should strengthen the case for no Change in the near future, and perhaps even increase the speculation that the next move is down".
The number of home loans approved in