Well it looks as though the RBA is coming out of its slumber, if this article is correct.
The Reserve Bank is confident most borrowers will be able to cope with rising interest rates, but it also warns recent buyers in particular should brace for falling property prices.
From the article:
The bank's twice-yearly Financial Stability Review (FSR) reported that, on the whole, Australian mortgage borrowers are in a much better position to deal with rising interest rates than they were before the pandemic.
"Most indebted households have benefited from strong growth in housing prices over the past year and, coupled with higher mortgage repayments in excess of scheduled requirements, the vast majority have accumulated substantial additional equity in their homes," the report noted.
The RBA estimated that only around 5 per cent of loans now have an outstanding loan-to-value ratio (LVR) greater than 75 per cent, compared to almost a quarter at the beginning of 2020.
This means that for 95 per cent of borrowers, it would take more than a 25 per cent drop in home prices to send them into negative equity, the dangerous position where the borrower owes more to the bank than their home is worth.
"The share of loans in negative equity is also estimated to be exceptionally low, at less than 0.25 of a per cent, down from 2.25 per cent in January 2020," the review added.
The improvement in both of these metrics has been mainly driven by the exceptional surge in housing values during the pandemic, with property prices surging by almost a quarter over the past year in the steepest growth seen since the late-1980s.
However, the RBA also warned that much of that gain is likely to be unwound over the next couple of years as interest rates rise.
"Estimates using a model of the housing market that takes into account historical relationships between interest rates and both demand and supply factors suggest that a 200-basis-point increase in interest rates from current levels would lower real housing prices by around 15 per cent over a two-year period," the FSR noted.