RBA jawboning could be enough to scare investors

In addition to the recent spike in investor lending, which now accounts for half of all housing finance commitments, the RBA noted the acceleration of auction clearance rates in recent months.

“At the moment I suspect that they are secretly hoping that their jawboning efforts, which of course will include talking about macroprudential controls, might do the job for them,” AMP Capital chief economist Shane Oliver said.

“Indeed the last few weekends, while they have been complicated by grand finals in Sydney and Melbourne, have seen slower auction clearance rates,” Mr Oliver told Mortgage Business.

“There are signs of a cooling off there,” he said.

The latest housing finance figures from the Australian Bureau of Statistics also showed softer growth for both investors and owner-occupiers.

The data reveals 51,787 loans were approved in seasonally adjusted terms over August – down 0.9 per cent from the 52,238 loans written in July.

“Maybe, just maybe they may not need to do anything,” Mr Oliver said.

According to credit services company Veda, all states have seen an easing in the growth of mortgage demand since late last year.

Historically, movements in Veda mortgage demand have tended to lead movements in house prices by around six to nine months.

Veda's mortgage data showed that home loan applications eased for the third quarter in a row, growing nationally at 5.1 per cent in the September quarter.

While substantially down from its peak, mortgage enquiries were strongest in NSW (+8.4 per cent), followed by Queensland (+6.9 per cent), Tasmania (+6.9 per cent), Victoria (+6.3 per cent) and the NT (+3.2 per cent).

Mortgage applications have fallen over the past year in WA (-2.1 per cent), SA (-3.1 per cent) and the ACT (-4.5 per cent).

After substantial growth that peaked around the new calendar year, mortgage demand continues to slow in the eastern states, compared to the highs reached late last year, Veda’s general manager of consumer risk Angus Luffman said.

“What we saw as a lead indicator in the June quarter numbers is now becoming a trend,” Mr Luffman said.

“The housing market has well and truly cooled in WA and SA and is coming off the boil in the eastern states,” he said.