Australia’s households went on a debt-fuelled home buying spree during the pandemic, spurred on by record low interest rates.
The value of new home loans to owner occupiers almost doubled in the 12-months from May 2020 ($12.1 Bn) to May 2021 ($22.8 Bn).
With nine consecutive increases in the Reserve Bank of Australia‘s cash rate since May 2022, new home loans dropped by almost 30% in December 2022 to below their long-term trend.
Will increased interest rates trigger further drops in Australian home prices?
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