Australia’s slowing housing market has intensified concerns about a broader economic downturn, with falling home lending, weakening property prices and subdued auction results raising fears of recession.
NAB reported home loan applications fell 15 per cent in the June quarter, while lending values dropped nine per cent as higher interest rates and the federal government’s negative gearing and capital gains tax changes weighed on investor activity.
EQ Economics managing director Warren Hogan warned the Reserve Bank would only be likely to cut interest rates if there was “calamity in the economy”, arguing the housing market was “going from bad to worse”.
Sydney and Melbourne recorded quarterly house price declines of 3.2 per cent and 2.6 per cent respectively, while growth in Brisbane and Perth slowed sharply.
NAB also revealed an increase in loans classified as “on watch”, signalling potential mortgage stress, although the bank said its business customers had continued to show resilience despite challenging economic conditions.
Image credit: Tom Rumble
As expected when you have a Labour govt…