Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Reserve Bank of Australia's cumulative 225bps of rate hikes since May continue to weigh on the property market, with the value of new housing loan commitments falling 3.4% m/m to AUD27.4 billion in August, according to the Australian Bureau of Statistics. It was the second straight month that housing loan commitments were below AUD30 billion following a fall of 8.5% in July. The value of new owner-occupier loans fell 2.7% in August, while new investor loans dropped 4.8%. Owner-occupier and investor loans are 36% and 70% higher, respectively, than February 2020.
First home buyer commitments rose 10.4%, the largest rise since August 2020, as buyers sought to take advantage of the 2022-23 First Home Guarantee.
The average loan size for owner-occupied dwellings fell to AUD589,000 from AUD609,000, though it remains 23% higher than February 2020. The RBA's aggressive tightening has sent a chill through Australia's property market. CoreLogic's national Home Value Index recorded a 1.4% decline in Sep, easing from a 1.6% decline in August. National prices fell 4.1% in the September quarter.
Meanwhile, building approvals - a volatile series - jumped 28.1% m/m in August, rebounding from an 18.2% m/m decline in July, as approvals for units jumped 99.1% m/m, according to the Australian Bureau of Statistics. The near doubling in apartment approvals has been driven by a sharp rise in rents.
Later Tuesday, in raising rates by a less than expected 25 bps to 2.60%, the RBA noted that "higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments."
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.