The Reserve Bank has increased the official interest rate at its past nine consecutive meetings,lifting the cash rate from 0.1 per cent at the start of May last year to 3.35 per cent following its first meeting of the year in February.
Financial markets and economists expect RBA governor Philip Lowe to announce a further quarter percentage point increase in the cash rate on Tuesday afternoon while signalling even more rate rises through the rest of the year.
The number of indicators suggesting the housing market is struggling has risen in the past week.
According to the Australian Bureau of Statistics (ABS),the value of home loans in January fell by 5.3 per cent after a 4.3 per cent tumble in December. They have now fallen by a record 35 per cent lower over the past 12 months.
The number of first home buyers taking out a loan has fallen to its lowest level in five years. Loans to first time buyers dropped 8.1 per cent in January after a 4.1 per cent fall in December. These loans have fallen 57.5 per cent since peaking in early 2021 and are now 27.5 per cent lower than their immediate pre-COVID level.
The drop in loans is feeding into a sharp fall in home approvals,which tumbled by 27.6 per cent in January. It was the single largest monthly drop since at least 1979.