The Reserve Bank of Australia (RBA) released aggregate mortgage data for September, with mortgage growth tanking to 1.6% over the September quarter – the weakest result since February 2021:
Mortgage growth plunging.
As illustrated in the next chart, quarterly mortgage growth has fallen sharply across both owner-occupiers (1.6%) and investors (1.2%):
Broad-based falls in mortgage growth.
Annual mortgage growth is now also falling at 7.3% in the year to September 2022:
Annual mortgage growth now falling.
The above data captures the first five interest rate hikes from the RBA and does not capture the 0.25% increase in October.
Moreover, there is typically a two to three-month lag between when the official cash rate is lifted and its impact on mortgage holders and the economy.
Most economists believe the RBA will lift the official cash rate another 0.25% on Tuesday, which will be followed by further rate hikes over coming months.
If true, borrowing capacity will continue to fall, which will further shrink mortgage demand and place additional downward pressure on house prices.
