“Crunch time” ahead as interest-only lending slumps and foreign property purchases fall

PHOTO: “Chinese demand for Aussie property continues at a strong rate despite the government’s efforts,” Credit Suisse strategist Hasan Tevfik said. Photo: Louise Kennerley

A collapse in the number of interest-only loans being written by big banks is said to be combining with a drop in Chinese buyers of Australian property to create a “crunch time” for the economy next year.

Further pressure will be put on the Reserve Bank to abandon its path toward hiking interest rates and further cuts to inflation and growth targets could lie ahead, according to Credit Suisse.

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