The recent pick-up in demand for housing credit “is unusual” the Reserve Bank said in its quarterly Statement on Monetary Policy yesterday.

“Nominal housing credit growth has been gradually increasing since August 2023, over which time the RBA has assessed financial conditions as being restrictive” the RBA said. 

“In previous tightening phases, housing credit growth generally decreased after a period of tighter monetary policy (and then continued to decline even as policy was eased). 

“Although housing credit growth did initially decline materially during the current tightening phase, the recent pick-up is unusual compared with previous periods of restrictive monetary policy.”

Loan discharges, the RBA noted, “remain high relative to new lending.”

Serviceability and affordability constraints have weighed on growth in the stock of outstanding mortgages, particularly for lower income borrowers.