Assuming NAB follows ANZ, CBA and Westpac’s lead and boosts variable mortgage rates, the housing correction should extend a little, which would be welcomed. In 2017 we expected peak-to-trough national house price falls of between 5 per cent and 10 per cent, and we remain on track to realise that objective.
The RBA says that the average interest rate on all outstanding home loans has actually decreased over the last year, and I have no reason to question that finding. But if system-wide borrowing rates do increase overall as banks pass on much higher funding and regulatory costs to customers, the drawdown in the value of Aussie housing could move into the 10-15 per cent range.
It’s getting rapidly worse says our now bank bond clean skin Chris Joye:
