Friday’s ABS data on new mortgage lending revealed another solid increase in September, driven by owner-occupiers:
As regular readers know, we consider the flow of new mortgages to be a prime indicator for property price growth. This view is based on the incredibly strong historical correlation between finance and prices, as illustrated by the next charts:
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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:
