What happened
Reserve Bank Assistant Governor Christopher Kent stated that three cash rate increases earlier this year are restricting activity as intended. Kent noted scheduled mortgage payments are near 2024 peaks relative to household income, while housing credit growth and new lending have declined significantly.
Why it matters here
Kent's remarks confirm that central bank rate hikes are actively dampening Australian household spending capacity and housing market turnover. Slowing credit growth reduces origination volume for mortgage lenders and impacts earnings visibility for consumer-facing businesses on the ASX.
What to watch
Track monthly Australian housing credit growth releases and official retail sales figures to gauge the ongoing contraction in domestic private demand and consumption.
Source
rba.gov.au