Victorian housing activity rockets

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By Leith van Onselen

It has taken a long time, but after a prolonged period of inactivity, the number housing transfers and mortgage lodgements in the state of Victoria skyrocketed in September, according to new figures released by the Department of Sustainability and Environment (DSE).

Looking at the transaction side of the market first, you can see that the number of transfers over September increased by 7% over the month and was up by 38% over the year – the highest number of monthly transactions since June 2011 (see next chart).

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The data series is not seasonally adjusted and is, therefore, inherently volatile. Accordingly, it is presented below on a rolling annual basis, which allows comparison to the same month the year before, therefore, overcoming issues around seasonality (see next chart).

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You can clearly see the big pick-up in activity in September, although the number of transfers remains 10% below the decade average.

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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, which shows a strong bounce over recent months, driven largely by a big surge in September:

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Again, the next chart shows the same data on a rolling annual basis (again overcoming seasonality), which also shows a clear uplift, with mortgage lodgements up by 2% over the year and mortgage discharges up by 3%:

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However, while overall housing activity across Victoria has clearly picked-up, the net number of mortgages created – calculated by subtracting mortgage discharges from mortgage lodgements – continues to be in negative territory, with losses also on the rise:

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According to the DSE, the number of mortgages lodged in the month of September was 1,067 less than the number of discharges. Similarly, on an annual basis, the number of mortgages discharged (194,960 in September) continued to exceed the number of mortgage lodgements (191,969 in September), meaning that 2,991 mortgages were lost in the State of Victoria in the 12-months to September 2013, up from from 2,312 mortgages lost in the year to August. The net loss of mortgages over the past year also compares to an average 11,761 net mortgage creations annually since the series began in 2002.

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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.