Australian mortgage demand strengthens

Today’s new mortgage data for November from the Australian Bureau of Statistics (ABS) recorded more growth:

Total new mortgage commitments (excluding refinancings) rose by 1.8% in November, with owner-occupied mortgages rising 1.6% and investor mortgages rising 2.2%.

Year-on-year, total new mortgage commitments (excluding refinancings) rose by 5.9%, with owner-occupier mortgages rising by 10.0%, offsetting a 3.2% decline in investor mortgages:

As shown above, both owner-occupier and investor mortgage growth has rebounded from the mid-2019 low.

First home buyer (FHB) mortgages rose by 2.1% in November, with their share of total mortgages at 19.8%:

The decline in investor mortgages has clearly helped FHBs, given the negative correlation between the two cohorts:

That is, investors are not crowding-out FHBs to anywhere near the same degree.

The above data is further evidence of Australia’s property price recovery, given new mortgage demand is the key driver of values. More on this tomorrow.

Leith van Onselen

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