RBA governor Michele Bullock is appearing before a parliamentary committee in Canberra this morning.
In her opening statement, she’s touched on what’s happening in Australia’s housing markets right now:
“Conditions in the housing market have softened, and a larger-than expected easing could be a downside risk to economic activity.
“The softer conditions partly reflect the usual transmission of monetary policy as well as tax policy changes and the broader economic environment.
“Housing prices have fallen in most capital cities and new housing loans have declined.
“But these falls follow a period of strong growth – housing prices are still around 50 per cent higher than they were in early 2020.
“Fundamentally, there is a structural undersupply in the housing market, which has underpinned prices over recent years.
“Despite the recent falls in housing prices, the share of borrowers in negative equity remains very limited and only a small share are facing severe difficulty with their loan repayments. This is not to downplay that, for those affected, these circumstances are deeply challenging. But it does indicate that financial stability risks are contained, including because borrowers, in aggregate, have built up considerable savings buffers over recent years.”