RBA Flags Sharp Decline in Housing Loan Commitments Amid Rising Rates

The Reserve Bank of Australia (RBA) has warned that housing finance is entering a slower phase due to government policy and rising rates.

In its August Statement on Monetary Policy, the RBA noted a 'sharp' recent decline in new housing loan commitments, driven by investors retreating amid higher interest rates and weakening housing conditions.

The central bank stated that total credit growth had held up to midyear, but is expected to ease over coming months as declines in housing prices flow through to housing credit growth.

The RBA attributed the decline in new housing commitments to the combined effect of softer market conditions, higher interest rates, and changes to investor taxation.