Mortgage rebound solidifies Australia’s housing recovery

Thursday’s Lending to households and businesses release from the ABS revealed that total mortgage lending (excluding refinancings) rebounded strongly in August:

As regular readers of MB will know, we consider the flow of housing and investor finance commitments to be premier indicators for dwelling value growth. This view is based on the incredibly strong historical correlation between finance and prices, as illustrated by the next charts:

As you can see from the above charts, mortgage growth has rebounded particularly strongly across both Sydney and Melbourne, which has driven the housing rebound. This is matched by the strong bounce in auction clearance rates across these two cities: