RBA 'likely to keep interest rates steady in April'
ICAP senior economist Adam Carr told the Australian Associated Press that the sharp drop in home lending would probably prompt the RBA "to sit back for a month to see what’s going on".
According to the Australian Bureau of Statistics, Australian housing finance commitments for owner-occupied housing fell 7.9 per cent in January.
Mr Carr said the minutes from the RBA’s March meeting – at which the bank decided to increase the cash rate to 4 per cent – showed that board members had not been aware of the dramatic fall in home lending.
"That was prior to the home lending data and as we’ve subsequently seen there’s been a very sharp drop and I think that will be enough to spook them and certainly it should spook everyone," he said.
Rising interest rates and tighter lending conditions have encouraged some Australians to compare home loans in search of the best offers.
Housing Industry Association senior economist Ben Phillips recently said that the Reserve Bank’s decision to raise the official cash rate earlier this month will make it even more difficult for first home buyers to enter the property market.
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