Housing loans increased by 2.8 percent in October as new personal loans and credit card growth slowed down.

Due to possible increases in interest rates, more people are becoming careful about getting new personal loans, the figure dropping by 0.4 percent to US$7.59 billion in October. Moreover, credit card growth plunged by more than half. According to the Australian Bureau of Statistics, commercial loans rose 5.2 percent to $29.6 billion.

The recent Reserve Bank interest hike has hit the real estate market and discouraged many from borrowing thus affecting loan rates. Australian households owed a record US$1.01 trillion in the June quarter, says the RBA, after almost twenty years of robust economic growth and appreciating home prices.

This has made Australian consumers cautious about incurring a lot of debt, seeing the effects of the financial crisis affect overseas markets. Currently, the country’s housing market is slowing down with prices expected to adjust when many sellers put their properties up for auction next year.

The Australian Property Monitors reports that auction clearance rates plunged by 48.7 percent in Sydney last weekend, from 53 percent the week before signaling that buyer interest was ebbing with less people willing to get a house loan.

Credit and charge card balances in the country amounted to US$47,792 billion in October, an increase of 5.8 percent from the same period last year when it amounted to US$45.153 billion based on RBA numbers.

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