QLD home transfers & mortgages blast off

By Leith van Onselen

The Queensland Department of Environment and Resource Management (DERM) has released data on housing transfers and mortgage lodgements for the month of October.

According to DERM, the number of housing transfers and mortgage lodgements rose by 21.2% and 18.7% respectively in October 2012, and were up 35.9% and 23.9% respectively on September 2011.

It should be noted, however, that Queensland transfers and mortgage lodgements were likely positively affected by the cancellation of the first home owners’ grant on pre-existing dwellings from mid-October, which could have pulled-forward demand from first time buyers seeking to take advantage of the grant before it expired. It will, therefore, be interesting to see whether housing turnover and mortgage volumes dip in the months ahead as first home buyer demand pulls-back.

Finally, the below chart shows the same transfers and mortgage lodgements data on a rolling annual basis, which removes the month-to-month volatility:

You can see that Queensland transfers and mortgage lodgements have been in an up-trend since late-2011. However, they still remain depressed, tracking -16% (transfers) and -18% (mortgages) respectively below the 12-year monthly average in October.

Twitter: Leith van Onselen. Leith 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.

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  1. I think it’s just about time to conclude the the driving down of interest rates is having an effect.

    Not much good if it simply allows for a resumption of horse-trading existing properties while doing nothing for new housing constuction though.

    • Interest rates may have worked a little bit but…

      Low interest rates over the long run will continue to reduce retirement incomes, thus pushing forward downsizing transfers and increase housing stock.

      Its all about which demographic will add more to the housing supply over the next few years. Will it be young owners/FHB or retirees?

    • reusachtigeMEMBER

      Nah, cuts and house prices to the moon! Yeah, great strategy folks, just great. Interest rate whingers!

  2. From what I have seen of the market and from discussions with agents that I know well, property sold well in September (Octobers recorded sales above) but halfway through October they slowed and have remained that way so far in November. It will be interesting to see if there is a corresponding increase in construction, although given the lag times in negotiation and drawing up plans and then submitting them to council there will be a gap of a few months before we see the numbers in building approvals, although we should see it in finance commitments before then.

    • Thanks for this insight as someone ‘on the ground’ in this area.

      Just to clarify, are you confirming that from your discussions, it does appear that demand has been pulled forward by the end of grants in mid-Oct? That is, demand after mid-Oct has been substantially less than demand prior to mid-Oct.

      • No I really didn’t see a rush at the end at all. In fact I was actively selling another family members house for him in this period. It sold for pretty much exactly what I thought it would sell for in a reasonable time. I had expected to see a rush of FTB’s all signing contracts at the last minute, but I didn’t.

        There may be a lot of building activity in the outer areas though, I’ll have to take a drive and see for myself.

        • Thanks for the insights, Pete. Going by the ABS housing finance data to September, it seems that there was a much bigger pull-forward from FHBs in NSW.

          NSW’s FHOG changes were flagged well in advance, whereas QLD’s were announced later and were relatively sudden by comparison.

  3. So it goes to show that interest rates should not have been cut, must be the dumbest idea ever, has done nothing but move money out from the productive economy.

    So no more rates cuts, it is making things worse.

    Even some of the writers on this site are falling into the rate cut trap, not good enough guys. I had expected better.

    • Part of the reason for the last interest rate cut was to make the $AUD less attractive to foreign investors and currency speculators.

      The fine balancing act is between an over priced currency and over priced housing. The RBA is in the unpleasant position of walking a tight rope and swinging a massive club. Not a good place to be.