The Victorian Department of Sustainability & Environment (DSE) released transfer and mortgage data for the month of September, which revealed further weakness in the number of housing transfers and finance commitments.
First, below is a chart showing the rolling annual number of housing transfers from March 2003 to September 2012:
September’s transfers (12,140) were the lowest September volumes on record and the third lowest monthly volumes in the series’ 10-year history. On a rolling annual basis the annual number of Victorian home transfers fell over the month – from 170,862 in August to 168,249 in September – which is the lowest level reached in the series’ 10-year history and 14% below average levels.
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 rolling 12-month basis:
The number of mortgage lodgements in September (13,479) was the lowest September volume on record and the third lowest monthly volume in the series’ history.
And below is the number of net new mortgages created, calculated by subtracting mortgage discharges from mortgage lodgements:
According to the DSE, the annual number of mortgages discharged (189,893) has again exceeded the number of mortgage lodgements (188,105), meaning that -1,788 mortgages were lost in the State of Victoria in the 12-months to September. This compares to the average of around 13,164 annual net mortgage creations since the series began in 2002. It was the seventh straight month that annual mortgage discharges have exceeded mortgage lodgements.
And below is a similar chart showing that the ratio of mortgages lodged to mortgages discharged:
Between 2003 and 2005, there were around 11 mortgages created for every 10 mortgages discharged. In the 12-months to September 2012, however, the number of mortgages lodged has slipped just below the number of mortgages discharged.
The Victorian Government, which is heavily reliant on stamp duty receipts, would not be happy with the above data. The Government had budgeted for a recovery in stamp duty receipts in the 2012-13 financial year. However, with transfer volumes continuing to contract, it is looking increasingly likely that their stamp duty estimates will undershoot, perhaps significantly.
Twitter: Leith van Onselen. He is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
