Housing recovery: Only hope remains

Only hope remains from the phantom housing recovery after the RBA released credit growth aggregates for October. Growth for housing credit has fallen to a positive 0.3 per cent, down from 0.4 per cent the month earlier. Over the 12 month period, housing credit is growing at just 4.7 per cent the worst figure on record.

Credit growth for owner-occupiers’ is also firmly stuck on 0.3 per cent. Over the 12 month period, housing credit growth for owner-occupiers’ has fallen to 4.3 per cent, the worst on record, from 4.5 per cent the month earlier.

This data would suggest the RBA can further cut interest rates this week without fuelling a new credit bubble in the residential housing sector.

» Financial Aggregates, October 2012 – The Reserve Bank of Australia, 30th December 2012.




9 Comments

  1. Whilst I’m sure many will welcome another rate cut by the RBA… I really don’t see how it will do the housing market any good. People aren’t borrowing money because the interest rates aren’t low enough… they’re not borrowing money because they can’t afford to! The fundamental problem still lies in the fact that housing just isn’t affordable give the wages Australians are currently paid and the prices that houses are currently priced at.

    http://www.mutilatethemortgage.com/2012/05/21/melbournes-median-house-price-should-be-280000/

  2. The lower the IR goes the smaller return I get on my savings and the less likely I am to buy ponzi property and chinese made junk from Harvey Norman.

  3. Wow isnt it amazing what year could do. Wasnt the RBA and government last year pointing the finger at Europe the US and the rest of the world telling them to get their house in order. Now Australia economy is skidding off the cliff. Arrogants bast@#ds deserve it as they didnt realize it was time to come up with a Plan B. The people are the ones who suffer and I hope ever Australian votes Gillard, Swan etc…. out of office in 2013.

  4. @LBS – absolutely, but also make sure every Australian doesn’t vote IN Abbott and Hockey etc, who will be much WORSE!!!

  5. It will be interesting if the RBA cuts rates today, to see the effect on housing. All the past rate cuts had almost zero affect, the RBA seems to be powerless during this cycle. Look at the chart below, it shows this rate cut cycle is not having same same impact on property as previous ones…

    House prices always rise after RBA cuts rates, but not this time!

    The property speculators will be waiting a long time for their much loved capital growth if even 3% interest rates can’t generate a rise in prices!

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