Mortgage slump points to falling property prices

Last week’s ABS mortgage commitments data for April revealed a sharp 4.8% decline, with owner-occupied mortgages falling 5.0% and investor mortgages falling 4.2%:

The below charts plot this data against CoreLogic’s dwelling values index for May. This provides a useful guide to short-term price movements for the market, given the historically strong correlation between mortgage credit growth and dwelling values.

First, the national picture is presented below, which shows annual mortgage growth turning down in April alongside dwelling value growth hitting a turning point:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.