The Reserve Bank of Australia (RBA) has all but confirmed that home buyers can expect a reprieve from rising rates, after admitting that it’s rapid succession of rate rises had hit household spending and curbed borrowing. 

Data from the Australian Bureau of Statistics shows housing finance to owner-occupiers weakened in March, falling 3.4 per cent.

In addition, finance approval numbers to owner-occupiers fell 25 per cent in 6 months.

Westpac chief economist Bill Evans said the reduction of stimulus helped dampen demand for finance. 

According to a recent Westpac report, the RBA’s move to begin normalizing interest rates since October together with the phase-out of the additional bonus under the government First Home Buyer Scheme contributed to the falling numbers.

“The impact on the housing sector is material and is an argument for the RBA shifting to a pause at least until the next inflation update,” Mr Evans said. 

But any relief in the official cash rate is likely to be short lived as commodity prices are expected to fuel the biggest business investment boom in the nation’s history, increasing the strain on the economy and fuelling greater inflation. 

If you are concerned about the interest rate that you are paying on your mortgage, phone John Whitten on 49722081 or contact him on jwhitten@ihl.net.au and he will be happy to discuss the matter with you.