According to a report published by the Australian Financial Review, the lowest housing credit recorded since July 1984 is in part due to investors who switched from interest-only mortgages to loans on principal and interests.
Data from the Reserve Bank of Australia show that housing credit rose 0.2% in January. From one fiscal year to the next, it has increased only by 4.4%, making it the lowest annual growth rate since 2013.
Cameron Kusher, research analyst at CoreLogic, said credit growth in January was worse than ever during the recession of the early 1990s.
"One of the main factors behind the slowdown in credit growth is the fact that many investors have switched from interest-only mortgages to principal interests," Kusher said in a statement.
Low interest rate conditions on interest-only loans are about to expire and about 650,000 borrowers with loans totaling about $ 230 billion may have difficulty refinancing, according to the bank's company. Investment Morgan Stanley.
"Previously, these borrowers did not pay back the principal of their mortgage, now that they are associated with a much lower demand for borrowers, they are paying down their capital and fewer new mortgage applications are being made to investors. presented, which has contributed to the continued slowdown in investor credit growth, "Kusher said in a statement.
In addition, Kusher stated that the Royal Bank Inquiry Commission was an obvious cause of the slowdown in lending in the country. In addition to the two factors mentioned by the research analyst, it was found that new loans were falling due to the weakening of credit demand.
"[Slowing demand credit] is a natural response to buyers' expectations that house prices will continue to decline," said Commonwealth Bank economist Gareth Aird.
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