Mortgage rates have fallen to below 2% in recent years, but interest rates are rising rapidly in Australia as the central bank looks to tame inflation.
"Every capital city apart from Darwin is now in a housing downturn, with a similar scenario playing out across the rest-of-state regions, where only regional South Australia recorded an increase in housing values for the month," Corelogic said.House buyers gather outside the auction of a renovated terrace in Sydney's Newtown in September.
The same pattern can be seen in Melbourne, the country's second biggest city. Since hitting peak prices earlier this year, house prices in Melbourne have fallen nearly 5%. National industry association for residential building in Australia, the Housing Industry Association, warned that home construction has slowed.
According to mortgage broker Catalyst, there's a"distinct drop-off in purchase enquiry with the first rounds of rate increases." The size of loans were also smaller and first-time home buyers, who have less borrowing power, have retreated. The ratings agency expects risks of delinquencies to continue mounting, particularly because Australian workers, while fully employed, will not see their wages rise accordingly.
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