Recent months have seen the favourable lending environment for households begin to tighten. Inflation concerns have bond markets pricing in an earlier cash rate move than the RBA has signalled. While the cash rate remains unchanged, fixed rate mortgage rates have risen in the past few weeks and regulators are gearing towards further macroprudential intervention in 2022.
The impact of these changes is at the margin. It is not until increases in the cash rate flow through that we expect a more meaningful curtailing of credit availability. Our expectation is for the cash rate to lift gradually from Q1 2023.
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