Mixed signals
The Reserve Bank of Australia released the latest Financial Aggregates figures for the month of March 2026, which showed another solid for business credit in the month.
The first impacts of the Iran conflict would barely have had time to take effect in these data, and over the year business credit rose 9.9 per cent.
Overall, credit growth in the economy was a strong 8.1 per cent over the year.
Housing credit growth remained solid at 0.6 per cent for the month, and 7.3 per cent for the year.
Much of the growth of late has been driven by investors, especially in regional Australia given the dearth of rentals.
Despite this, it appears that the housing credit impulse passed a peak at the end of 2025 at the national level.
Australia's home value index is weighted towards Sydney and Melbourne, and prices in those cities are down by around 1 per cent in nominal terms of the past quarter.
What's going on?
From chatting to agents and industry contacts it sounds as though the red hot Perth market is now coming off the boil, with further interest rate hikes in May and beyond looking likely to end the cycle.
For now, Adelaide and Brisbane still seem to have some momentum.
In Sydney there have been some examples of recent house sales achieving $200,000 to $400,000 less than might have been expected in the more ebullient environment a few months ago.
While sentiment may be down, asking prices for units in both Sydney and Melbourne kept increasing to new highs over the past couple of months, which seems to reflect another explosion in construction costs and the higher demand in the lowest price points of the market (fuelled by the 5 per cent deposit scheme for first homebuyers).
Market pricing is looking for a couple of further interest rate hikes, starting in May.
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