Australia’s mortgage rebound solidifies

Today’s housing finance data for September from the Australian Bureau of Statistics (ABS) recorded a continued rebound in mortgage commitments:

As shown above, total finance commitments (excluding refinancings) rose by 1.3% in September, with owner-occupied commitments rising 3.2%, more than offsetting a 4.0% fall in investor commitments.

However over the year, total finance commitments (excluding refinancings) fell by 2.7%, with investor commitments tanking by 13.0% but owner-occupied rising by 1.4%.

First home buyer (FHB) commitments fell by 1.9% in number terms and by 2.0% in value terms in September. Over the year, FHB commitments were up by 6.8% (number) and by 16.9% (value):

FHB’s share of Australian mortgages (excluding refinancings) fell to 28% by number and 25% by value:

New home finance (construction and new combined) rose by 0.8% over September and was up by 0.2% 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 (-2.7%) in trend terms, and shows both owner-occupied finance (+1.4%) and investor finance growth (-13.0%) are showing an improving trend:

The above data shows is further evidence of Australia’s property recovery, given growing new mortgage demand is the key driver of rising prices.

Leith van Onselen

Comments

    • When the owner occupier drives the prices up enough investors will then be able to release equity for a deposit on a new IP, then they will flood the market. This is that rotation that Peachy talks of. I hope she is wrong.

  1. Owner occupiers finances up, investors down BUT FHB share of mortgages drops which I thought would be mainly OO. Doesn’t look like things are solidifying it looks like the bounces is a bit precarious