There have been a growing number of signs that the RBA's interest rate hikes are starting to have an effect on Australian households. Yesteday, data from the abs showed that the total value of dwelling finance commitments fell a seasonally adjusted -5.3% from March, whilst the number of loans made to owner occupiers fell a seasonally adjusted -6.1% in March to its lowest level in 3 years.
Meanwhile House prices in some parts of Sydney have started to tumble. From the Daily Telegraph:
Sydney properties halve in price
HOUSE prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates.
The falls - in Sydney's west, the Hills district, and Sutherland Shire - are far steeper than previously thought, and show the devastating effects of the RBA's rate-hiking spree.
In the past six months, 30 homes across Sydney have been sold for at least $100,000 less than was paid at the height of the property boom, many as a result of distressed mortgagee sales.
One property in Bankstown, bought for $500,000 in August 2005 sold in February for $215,000 - a loss of $285,000.
Several other properties in Sydney's west have recently been sold for losses of more than 30 per cent.
Sutherland Shire, which was thought to have escaped relatively unscathed, is now having prices plummet.
One property in Oyster Bay, bought for $1.09 million in December 2001, sold in March for $680,000, while a Caringbah apartment bought for $339,000 in June 2004 was sold for a loss of $104,000 last October.
Click here to see those homes
The worst affected suburb was Parramatta, with 11 homes sold at a loss in the past six months. Neighbouring Merrylands had 10, while Punchbowl also suffered substantial losses.
The data - complied exclusively for The Daily Telegraph - showed that even the more affluent suburbs are now beginning to suffer. Several homes in Coogee and Paddington were sold for losses of more than 25 per cent.
And experts predict that the losses will get worse as the year goes on.
Shane Oliver, chief economist at AMP Capital, said: "The pain of higher interest rates has only just started to kick in and we will see further falls over the next 6-12 months.
click on the link for the full story