Today’s housing finance data for July from the Australian Bureau of Statistics (ABS) recorded a strong rebound in mortgage commitments:
As shown above, total finance commitments (excluding refinancings) rose by 5.1% in July, with owner-occupied commitments rising 5.3% and investor commitments rising 4.7%.
However, 0ver the year, total finance commitments (excluding refinancings) crashed by 11.8%, with investor commitments tanking by 20.4% and owner-occupied falling by 8.1%.
First home buyer (FHB) commitments also rose by 1.3% in number terms and by 5.2% in value terms in July. Over the year, FHB commitments were down by 0.9% (number) but up by 5.5% (value):
FHB’s share of Australian mortgages (excluding refinancings) remained at 29% by number and 25% by value:
New home finance (construction and new combined) rebounded by 5.9% over July but was down by 12.27% year-on-year:
As you can see, increased demand for purchases has been largely offset by lower demand for construction.
Finally, the below chart tracks the annual growth in the value of finance commitments (-14.2%) in trend terms, and shows both owner-occupied finance (-11.0%) and investor finance growth (-22.0%) have crashed; albeit both are showing an improving trend:
Above is more evidence of Australia’s property recovery as growing new mortgage demand is the key ingredient to rising prices.