The Australian housing market slowdown is continuing and things look like they will keep slowing as we head into the new year.
In the three months to November house price growth recorded just 0.2 per cent increase across the nation.
With banking regulators continuing their application of lending brakes things don’t look like speeding up any time soon.
Here in Melbourne, auction clearance rates have been falling each week for the last month and recorded 65.4 per cent over the 1647 auctions that were held last weekend.
Time will tell if Melbourne’s clearance continue to slide as much as Sydney where they are recording rates in the mid-50s.
There’s 1717 homes set to go under the hammer in Melbourne this weekend so it shapes as an interesting test of the market’s strength.
APRA’s macro-prudential measures are having a big impact on slowing interest-only lending in the country and as a result on house prices.
JP Morgan’s Tom Kennedy says he thinks there could be even more regulator crackdowns to come.
“While the RBA appears somewhat content with the impact of macro-prudential restrictions on the property market, the bank is cognizant that housing credit growth continues to outpace incomes growth, which in turn is driving the aggregate household debt-to-income ratio higher,” he told Business Insider.
“We therefore remain mindful of the risk that the regulatory framework is tightened further, potentially via the implementation of borrower debt-to-income restrictions.”
Mr Kennedy says lenders are so far strictly complying with regulator crackdowns, with interest-only loans now well below the 30 per cent of lending that APRA set as a cap.
Regulators also capped growth in investor loans to 10 per cent each year back in 2015.