(Bloomberg) -- Australian households with stretched finances are increasingly opting to sell their property to pay off home loans at a time of elevated interest rates, a senior Reserve Bank official said. 

Loan discharges or mortgage release from property sales have increased, and by more than the rise in new lending, RBA Assistant Governor Christopher Kent said in a speech in Melbourne on Wednesday. He provided a chart that showed mortgage discharges were running above A$40 billion ($26.7 billion) per quarter — the highest since at least 2010.

“These trends are likely to reflect incentives to reduce or limit indebtedness in response to higher interest rates,” Kent said. 

The property sales are likely proving profitable rather than the usual case of loss-making as they come at a time when Australia’s housing market is running red-hot. Sydney prices are at a record high, driven by a supply shortfall and swelling population.

In his speech titled ‘Restrictive Financial Conditions in Australia,’ Kent said the effects of tighter monetary policy are felt most directly by the roughly 40% of households who hold a mortgage. The RBA has left rates at a 12-year high of 4.35% since November but isn’t ruling out a further hike.

Kent said recent economic data have been mixed and that the RBA is vigilant about upside risks to inflation. Data on Wednesday showed a gauge of monthly consumer prices rose more than expected in May, boosting the case for a hike at the central bank’s next meeting on Aug. 5-6. At the same time, consumer sentiment remains in the doldrums.

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