Australian Housing Market Hits Brakes Amid Higher Borrowing Costs

Australia's housing market has slowed down significantly in recent months due to higher borrowing costs and changes to tax incentives.

The Reserve Bank of Australia, led by Governor Michele Bullock, raised interest rates three times between February and May to combat inflation. This move has had a ripple effect on the housing market, causing house prices in Sydney and Melbourne to drop by nearly 5% since the start of the year.

Auction clearance rates have also declined, while loan enquiries and property sales are down. The slowdown is expected to impact related industries such as real estate services, construction, and home renovations.

The New South Wales Government has revised its stamp duty revenue forecast downward by AUD 5.3 billion over the next four years due to the decline in housing market activity.