Credit growth plummets
Housing credit growth slowed to just 0.24 per cent in June, the lowest since August 2020, suggesting that housing prices will lose some momentum going into spring.
Anecdotally mortgage brokers are reporting a recent lift in activity as borrowers sense that interest rates are close to peaking, but the June figures were very soft.
Overall credit growth in the economy dropped to just 0.2 per cent, so this engine of economic growth is really plunging now as interest rate hikes begin to bite.
The economy recorded only 0.2 per cent growth in the first quarter of the year, and Q2 doesn't look any better, so things are already teetering on the brink of a recession, if we aren't quite there already.
Investor credit growth turned sharply negative in June, the clearest evidence yet that some portfolio and cashflow-focused investors are offloading their properties.
Rental squeeze
For much (if not most) of the country this will likely present little problem given the supply pipeline of new housing still due to come online.
But I do wonder about the route Victoria is going down with its proposed expanded land taxes for landlords, rent controls, tenancy rights, and so on.
There's presumably a lot of hope being pinned on Build to Rent projects coming to the rescue.
Brisbane is another city where there is an awful lot of pressure on the rental market.
Australia's population is projected to grow by 2.2 million over the next five years.
But cumulatively there have been so many moves to disincentivise investors, from the interest-only lending crackdown, higher mortgage rates for investors, and a record 300 basis points serviceability assessment buffer, in addition to all off the tenancy rights changes and other proposed tax changes.
PropTrack reported that total rental listings in Melbourne fell precipitously by -22.7 per cent over the past year, while asking rents are up by more than 20 per cent over the past year.
Could get messy.
