The Victorian Department of Sustainability & Environment (DSE) released transfer and mortgage data for the month of February, which revealed resurgent weakness in the number of housing transfers and finance commitments.
First, the below chart shows the number of housing transfers on a monthly and 3-month moving average basis (3MMA):
And the next chart shows the same data on a rolling annual basis from January 2003 to January 2013:
According to the DSE, it was the weakest February in the 11-year history of the data, with just 13,819 housing transfers occurring over the month, compared with a February average of 19,718.
Reflecting this weak result, the annual number of Victorian home transfers fell from 170,368 in January 2013 to just 169,025 in February – which is the second lowest level reached in the series’ history (behind October 2012) and 13% below the 11-year average level.
The DSE’s mortgage finance statistics are unique in that they provide data on both mortgage lodgements (i.e. new mortgages) and mortgage discharges (i.e. mortgages repaid in-full). Below is a chart showing both series on a 3MMA basis:
And the next chart shows the same data on a rolling annual basis:
And below is the number of net new mortgages created, calculated by subtracting mortgage discharges from mortgage lodgements:
According to the DSE, the number of mortgages lodged in the month of February was -439 less than the number of discharges (i.e. 14,948 versus 15,387). On an annual basis, the number of mortgages discharged (189,483) also continued to exceed the number of mortgage lodgements (187,596), meaning that -1,887 mortgages were lost in the State of Victoria in the 12-months to February 2013, up from -1,306 mortgages lost in January. This compares to the average of around 12,560 annual net mortgage creations since the series began in 2002.
And below is a similar chart showing that the ratio of mortgages lodged to mortgages discharged, which has been below 1.0 since May 2012:
Despite the recent pick-up in Melbourne house prices, which was reflected by an improvement in net mortgage creation between November and January, the data has worsened once more and suggests that the Victorian (Melbourne) housing market remains on a fragile footing.