By Eliza Owen, Head of Research, CoreLogic Australia

CoreLogic published a note outlining what we knew about the so-called ‘fixed-rate cliff’ in February this year. It was a forward look into what we could expect when an estimated 1.3 million home loans went from low fixed rates to high variable rates.

Now, six months later, we’ve arrived at what was forecast as the peak transition period, a three-month duration where the bulk of these loans would expire. August provides us with an understanding of how the housing market is performing amid this critical transition phase and fresh insights on the state of the mortgage market from the RBA and APRA.

Today’s Pulse summarises the state of risk in the housing market, as the majority of fixed-term facilities created through COVID expire. There has been a slowdown in economic activity and housing market momentum in response to higher rates across all mortgage holders, and CoreLogic has observed an unusual increase in new listings over the past few weeks. Overall, the risk of arrears and default remains contained within Australia’s large mortgage market and we expect a level of resilience amid tight labour market conditions.