QLD mortgage lodgements post worst June on record

By Leith van Onselen

Last week, the Queensland Department of Environment and Resource Management (DERM) released data on housing transfers and mortgage lodgements.

The DERM data is current to June 2012, so it leads the Australian Bureau of Statistics (ABS) Housing Finance data, which is due to release figures for May, by one month. On the other hand, DERM records transactions at settlement date, not sale date, so would lag the signing of the contracts of sale (Section 32’s) by the settlement time, typically between 30 and 90 days.

According to DERM, the number of mortgage transfers (10,191) and mortgage lodgements (10,909) in June fell -11% and -13% respectively over the month. They were also the lowest June figures in the series’ 12-year history (see below chart).

The below charts plot both series against the average number of transfers/mortgage lodgements over the life of the series. First, the transfers data:

According to DERM, housing transfer volumes in June were -35% below average levels.

And below is the mortgage lodgments chart:

Mortgage lodgements were -37% below average levels, according to DERM.

Finally, the below chart shows the same transfers and mortgage lodgements data on a rolling annual basis:

Clearly, Queensland transfers and mortgage lodgements, while above their early-2011 lows, remain highly subdued relative to the past decade.

When viewed in isolation, the DERM data suggests that Queensland home values are likely to remain soft, but should perform better than they did in 2011, where they (Brisbane) fell -6.8% over the year according to RP Data.

Wednesday’s ABS housing finance data for the month of May should provide further colour.

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Comments

  1. The loss or anticipated loss of Public Service jobs in Qld must be having an affect (effect?). 40K of prime banking clients will change overall patterns of both borrowing and lending.

    Slow melt rates of correction are IMO between 5 and 6 % YoY.

    Deflation – Inflation – Gold

  2. The Patrician

    That stamp duty receipt update will be interesting.

    I wonder how those forecsts are going?

  3. PetervmMEMBER

    Its not all bad, two friends in the last few weeks both put their houses on the market and sold them straight away.

    One was at Rochedale (outer limits of Brisbane City 20mins CBD) which had two contracts on it within a few days of it being listed. The other at Mansfield (15mins CBD) was only listed this past weekend and had 32 people inspect the property. My friend is now negotiating with two buyers.

    • BobTurkeyMEMBER

      I know what your saying. Round here sales are still happening within a week or two of listing and there are plenty of buying+reno jobs still starting.

      6km south of the city the prices have dropped maybe 5-10% off the high, but the market is still hot.

      Having said that we are looking to buy in the outer west and recently saw one house sell for 25% less than the asking price. another appears to have been on the market for 6 months or more.

      Small sample I know.

      Gobble gobble.

  4. The Patrician

    “Queensland home values are likely to remain soft, but should perform better than they did in 2011”

    Leith,
    Could you give your reasoning behind the above statement?

    • Mortgage demand, while still soft,is above the lows of last year. Prices are also significantly lower, so now represent better value.

      In addition, the number of homes for sale has declined by around -8% from last year and rental vacancy rates have tightened.

      • The Patrician

        Thanks for that.

        So your assessment is -6% to 0% price change in 2012-13 statewide?

        • No. Baring any significant “shocks” (e.g. commodity price correction), I forecasted that Brisbane home prices would be ‘flat’ (-2% to +2%) over the next 12 months.

          Given prices are down around -2% since 31 Dec 2011, this implies a -4% to 0% result for calendar year 2012.

          • The Patrician

            Thanks Leith.

            Just to be clear the -4% to 0% forecast is for Brisbane not Qld?

            If so, do you see the Qld forecast higher or lower than Bris?

  5. From July 1 this year, Qld Stamp Duty on PPOR dropped significantly – a saving of around $8-10k on your “average” family home.

    The reduction applies only to options or contracts signed on or after July 1.

    Seems conceivable that this would put a bit of a damper on sales leading up to July 1.

    Will be interesting to see what happens after that date.

    More government-induced market distortion, perhaps?

        • I don’t think that we will see added induced distortion, but I do expect that the return of the old stamp duty regime will have artificially depressed sales in June.
          I have been expecting a rise in the median post 01/07/12 but so far that hasn’t happened.

          • Going out on a limb here due to uncertainty, but I believe that’s what most of the people in the crosshairs already are.

            Could be mistaken though.

          • False.

            Current credit rating regimes mean that a severe downgrade will decimate your economy. Large debt in Queensland will have to be contained, as economies compete on austerity it is self referencing.

            There will be no re-hiring to simply fill the fat – absurd position.

          • I understand the notion of sacking public servants only to re-hire them as contractors and temps so as to give the appearence of reducing headcount………but this has been going on for years.

            We might be approaching the stage where they will have to start sacking nurses, teachers and police officers if they want to keep axing the official headcount.

            The fact that I have heard almost nothing from the union suggests that job losses thus far are concentrated in the “shadow” public sector. After decades of neo-liberalism, I’m not sure how much room is left to sack public sector workers and re-hire them as Claytons public servants without it becoming very obvious.

      • BobTurkeyMEMBER

        Not sure this is going to be that significant. A few thousand off the price of houses worth $500k+ isn’t earth shaking.

        Maybe investors are salivating but home traders probably aren’t going to radically change their behaviour because of it.

        Gobble gobble.

        • Turkey – it is significant as a stamp duty discount is part of “enabling capital” that allows people to buy. $10K saved in stamp duty is far more important than a $10K discount on the dwelling price.

          If you go through the motions step by step you will understand what I mean.

        • Turkey,

          “A few thousand off the price of houses worth $500k+ isn’t earth shaking.”

          Dunno about that – in years gone by, a few grands worth of FHB money worked wonders.

          DE,

          “….distortion is coming in both directions.”

          Agreed….we live in interesting times.

  6. reusachtigeMEMBER

    Where’s that mortgage spruiker dude from Queensland that’s been telling us it’s running hot up there?

  7. Top post, Leith. Qld transfers never recovered after the floods. 18 months of weakness and no end in sight.

    I invite our bull friends to suggest what could reverse falling land prices – we are all ears. I can see nothing preventing revert to mean and a thousand agonies for the heavily indebted.

    Don’t Buy Now!

    • Nothing needs to be done David – the market is reversing all by itself. Just be patient.

      BTW your mantra is out dated for Brisbane – one of the dangers of generalisation.

  8. My mantra is as fresh as a daisy for Brisvegas. The only bottoms there are tanning on the beach. You might be bored by it, but this correction has a few years to travel yet.

    • Absolutely.

      They’re broke and the latest circus act at the HCOA is an absolute joke, wreaks of desperation. Have not seen that kind of behaviour for years – its Tea Party tactics. Sad.

    • +1 funny of the day 😉

      “The only bottoms there are tanning on the beach. ”

      Come on Pete you can see the funny side of that one! (lucky you in Qld.)

      😉

      as for us in Vic no chance to cold down ere!

      TM