Victorian mortgage demand bounces back

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By Leith van Onselen

Yesterday, the Department of Sustainability and Environment (DSE) released housing transfers and mortgage data for the month of January, which recorded a decent bounce in the number of mortgages lodged and homes transferred.

The number of housing transfers increased by 12% in January, partly due to seasonality, but were also up 6% over the year (see next chart).

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However, on a rolling annual basis, housing transfers remain highly depressed, tracking near decade lows and still -12% below the 13-year average (see next chart).

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:

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And below is the number of net new mortgages created, calculated by subtracting mortgage discharges from mortgage lodgements:

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According to the DSE, the number of mortgages lodged in the month of December (16,800) increased by 24% in January and was up by 4% over the year. It was also the first time in seven months that mortgage lodgements exceeded mortgage discharges (16,102), causing the number of mortgages lost in the state of Victoria to fall to -1,306 in the 12 months to January 2013. This compares to an average of around 12,700 annual net mortgage creations since the series began in 2002.

Finally, below is a similar chart showing that the ratio of mortgages lodged to mortgages discharged:

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Between 2003 and 2005, there were around 11 mortgages created for every 10 mortgages discharged. In the 12-months to January 2012, however, the number of mortgages lodged remained just below the number of mortgages discharged, although the ratio has crept back towards parity after bottoming-out in October 2011.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.