The Reserve Bank of Australia (RBA) released aggregate mortgage data for July, which showed that the quarterly growth in mortgage credit declined to 1.7% – the weakest result since May 2021:
Mortgage demand continues to slow.
As illustrated in the next chart, mortgage growth has slowed across both owner-occupiers (1.8%) and investors (1.7%):
Both owner-occupier and investor mortgage growth slowing.
Annual mortgage growth has also turned down, falling to 7.7% in the year to July 2022:
Annual mortgage growth turns down.
The above data only captures the first three interest rate hikes from the RBA, and does not capture the 0.5% increase in August.
Economists and markets unanimously believe that the RBA will hike the official cash rate by another 0.5% next week, which will be followed by further rate hikes over coming months.
If true, this will obviously reduce borrowing capacity and shrink mortgage demand, placing further downward pressure on Australian house prices.
